annual report - nevada powers, duties and functions. the department is responsible for administering...

State of Nevada

DEPARTMENT OF TAXATION

ANNUAL REPORT

Fiscal 2013 - 2014

TABLE OF CONTENTS

1

I. DEPARTMENT OF TAXATION

MISSION STATEMENT--------------------------------------------------------------------------------------------- 3

ORGANIZATIONAL CHARTS------------------------------------------------------------------------------------- 4

TOTAL DEPARTMENT TAX REVENUES AND DISTRIBUTIONS--------------------------------------- 9

STATUTORY AUTHORITY; BOARDS AND COMMISSIONS--------------------------------------------- 10

DEPARTMENT ADMINISTRATION, ORGANIZATION AND FUNCTION------------------------------ 12

DEPARTMENT FINANCIAL STATEMENT--------------------------------------------------------------------- 14

II. SALES, USE AND MODIFIED BUSINESS TAXES

COMPONENTS OF SALES AND USE TAX RATES---------------------------------------------------------15

CERTIFIED POPULATION----------------------------------------------------------------------------------------- 18

SALES AND USE TAX REVENUE------------------------------------------------------------------------------- 19

LOCAL SCHOOL SUPPORT TAX REVENUE-----------------------------------------------------------------21

BASIC CITY/COUNTY RELIEF TAX REVENUE--------------------------------------------------------------23

SUPPLEMENTAL CITY/COUNTY RELIEF TAX REVENUE----------------------------------------------- 25

LOCAL OPTION SALES AND USE TAX REVENUE---------------------------------------------------------29

STAR BOND REVENUE-------------------------------------------------------------------------------------------- 32

TAXABLE SALES COMPARISON--------------------------------------------------------------------------------33

CONSOLIDATED TAX-----------------------------------------------------------------------------------------------34

BUSINESS LICENSE FEE------------------------------------------------------------------------------------------38

MODIFIED BUSINESS TAX----------------------------------------------------------------------------------------39

III. EXCISE TAXES

LIVE ENTERTAINMENT TAX--------------------------------------------------------------------------------------41

BANK EXCISE TAX-------------------------------------------------------------------------------------------------- 42

INSURANCE PREMIUM TAX--------------------------------------------------------------------------------------43

CIGARETTE AND OTHER TOBACCO PRODUCTS TAX REVENUE-----------------------------------45 TRANSFER OF CIGARETTE TAX REVENUE------------------------------------------------------------49

TABLE OF CONTENTS

2

Excise Taxes (continued)

LIQUOR TAX REVENUE--------------------------------------------------------------------------------------------50 TRANSFER OF LIQUOR TAX REVENUE------------------------------------------------------------------54

ALCOHOLIC BEVERAGE GROWTH----------------------------------------------------------------------------55

LODGING TAX-------------------------------------------------------------------------------------------------------- 57

ESTATE TAX---------------------------------------------------------------------------------------------------------- 58 DISTRIBUTION OF ESTATE TAX REVENUE------------------------------------------------------------ 59

TIRE TAX--------------------------------------------------------------------------------------------------------------- 60

GOVERNMENT SERVICES FEE--------------------------------------------------------------------------------- 61

MEDICAL MARIJUANA TAX---------------------------------------------------------------------------------------63

IV. LOCAL GOVERNMENT SERVICES

LOCAL GOVERNMENT SERVICES OVERVIEW------------------------------------------------------------ 64

CERTIFICATION OF APPRAISERS----------------------------------------------------------------------------- 67

STATE BOARD OF EQUALIZATION---------------------------------------------------------------------------- 68

ASSESSED VALUATIONS----------------------------------------------------------------------------------------- 70

REAL PROPERTY TRANSFER TAX---------------------------------------------------------------------------- 72

NET PROCEEDS OF MINERALS-------------------------------------------------------------------------------- 74

MINING PROPERTIES---------------------------------------------------------------------------------------------- 77

PROPERTY TAXES - CENTRALLY ASSESSED PROPERTIES---------------------------------------- 78

LOCAL GOVERNMENT FINANCE------------------------------------------------------------------------------- 82

3

Department of TaxationTax Commission

Robert R. Barengo - ChairmanDeonne E. Contine – Executive Director

Mission

Philosophy

Goals1. Ensure the stable administration of tax statutes.2. Improve compliance through education, information and enforcement.

5. Assure the fair and equitable treatment of taxpayers.6. Enhance workforce proficiency through training and communication.7. Improve tax administration through new technology.

Main Office: Las Vegas District Office: Reno District Office:1550 College Parkway, Suite 100 Grant Sawyer Office Building Kietzke PlazaCarson City, NV 89706 555 E. Washington Ave, Suite 1300 4600 Kietzke Lane

Las Vegas, NV 89101 Building L, Suite 235Mailing: Phone: (702) 486-2300 Reno, NV 895021550 College Parkway, Suite 115 Fax: (702) 486-2373 Phone: (775) 687-9999Carson City, NV 89706 Fax: (775) 688-1303

Phone: (775) 684-2000 Henderson Field Office:Fax: (775) 684-2020 2550 Paseo Verde Pkwy, Suite 180In-State Toll Free: (800) 992-0900 Henderson, NV 89074

Phone: (702) 486-2300Fax: (702) 486-3377

or one of our offices at the following locations

Provide fair, efficient and effective administration of tax programs for the State of Nevada in accordance with applicable statutes,regulations and policies. Serve the taxpayers, State and Local Government Entities, and enable and recognize Departmentemployees.

Dedicated to the highest standards of professionalism and ethical conduct; committed to consistent, impartial and courteousservice and treatment. Providing resources, training and support to the men and women of the Department, and fosteringinitiative, creativity and effective performance.

3. Cooperate with other agencies and entities to better serve taxpayers.

Please visit our Web Site at http://tax.nv.gov/

4. Provide improved and more efficient service.

9

TOTAL DEPARTMENT TAX REVENUES AND DISTRIBUTIONS

6

7

8

9

Sales and Use Taxes 74.6%

Modified Business Tax

7.7%

Real Property Transfer Tax

1.7%

Cigarette and Tobacco Taxes

2.2%

Net Proceeds of Minerals Tax

1.2%

Centrally Assessed Property Tax

1.9%

Insurance Premium Tax

5.1% Other Taxes

5.7%

TAX REVENUES

State General Fund 38.0%

State Distributive School Fund

2.3%

Local Governments

55.9%

Other Distributions 3.0%

State Debt Service 0.2%

TAX DISTRIBUTIONS

10

DEPARTMENT OF TAXATION

Established April 1913 as the Nevada Tax Commission.

NAME OF LAW

Tourism Improvement District Law 271ALocal Government Budget and Finance Act 354General Provisions (includes Consolidated Tax) 360Business License Fee 360.760-360.796Simplified Sales and Use Tax Administration Act 360BProperty Tax, Taxes on Agricultural Property and Open Space 361, 361ATaxes on Patented Mines and Proceeds of Minerals 362Excise Tax on Banks 363A.120Taxes on Financial Institutions, Business Tax 363A, 363BTax on Rental of Transient Lodging 364.125Business Tax (repealed) 364ALive Entertainment Tax 368AIntoxicating Liquor Licenses and Taxes 369Tobacco Licenses and Taxes 370State Sales and Use Taxes 372Local School Support Taxes 374Real Property Transfer Tax 375Tax on Estates 375AGeneration Skipping Transfer Tax 375BTaxes for Development of Open-Space Land 376ACity-County Relief Tax 377Taxes for Miscellaneous Special Purposes 377ATax for Infrastructure 377BResidential School Construction Tax 387.329 -387.332Programs for Recycling (Tire Tax) 444A.090Short Term Auto Lease Fee 482.313Control of Floods - Taxation 543.600Insurance Premium Tax 680BMedical Marijuana Tax 453A

BOARDS AND COMMISSIONS

Robert Barengo, Chairman George Kelesis, Member Thomas Sheets, MemberAnn Bersi, Ph.D. Member Joan Lambert, Member Craig Witt, MemberJim DeVolld, Ph.D., Member John Marvel, Member

Governor Brian Sandoval, Ex Officio Member

Nevada Tax Commission members are appointed by the Governor. The Commission is the head of the Departmentand exercises general supervision and control over its activities. The Chief Administrative Officer of the Department is the Executive Director, who is also appointed by the Governor. Actions by the Department may be appealed to theCommission as provided by law. The Commission may review all decisions of the Department and may reverse,affirm or modify them.

Statutory authority: Chapter 748 of the 1975 Statutes established the Department of Taxation and provided for itsorganization, powers, duties and functions. The Department is responsible for administering the following laws:

NRS CHAPTER

11

Boards and Commissions (continued)

Anthony (Tony) Wren, Chairman Benjamin Q. Johnson, Member Dennis Meservy, MemberKeith Harper, Member Aileen Martin, Member

Marvin Leavitt, Chairman Beth Kohn-Cole, Member George Stevens, MemberJohn Sherman, Vice-Chairman Marty Johnson, Member Mary Walker, MemberAlan Kalt, Member Andrew Clinger, Member Julia Teska, MemberJeff Zander, Member Mark Vincent, Member

Shannon Silva, Chair Jeff Payson, Member Bruce Bartolowits, MemberDorothy Fowler, Vice-Chair Jeff Johnson, Member Janet Kelley, Member

John Restrepo, Chairman Kyle Davis, Vice Chairman Roger Bremner, MemberSenator Greg Brower, Member Dennis Neilander, MemberRobert E. Campbell, Member U.S. Representative Steven Horsford, Member

The Mining Oversight and Accountability Commission was created by Senate Bill 493 of the 2011 Session of theNevada Legislature. The Commission is comprised of seven members who are appointed by the Governor. TheCommission has oversight of compliance with Nevada law relating to the activities of each state agency, board,bureau, commission, department or division with respect to the taxation, operation, safety and environmentalregulation of mines and mining in Nevada. The Department of Taxation serves as staff to the Commission.

The Property Appraiser Certification Board is composed of six members, three of whom are qualified appraiserschosen by the majority vote of the Association of County Assessors and three are appointed by the Nevada TaxCommission. The Board advises the Department on matters pertaining to certification and continuing education ofappraisers.

The State Board of Equalization members are appointed by the Governor. The Board hears and acts on appealsfrom the actions of the various county boards of equalization or from valuations set by the Nevada Tax Commission.The Board of Equalization convenes on the 4th Monday in March and shall conclude the business of equalization incases having a substantial effect on tax revenues on or before April 10. Additional cases not having substantial effecton tax revenues may be heard at meetings prior to November 1.

The Committee on Local Government Finance is composed of 11 members appointed as follows: three personsappointed by the Nevada League of Cities; three persons appointed by the Nevada Association of Counties; threepersons appointed by the Nevada School Trustees Association; and two persons appointed by the Nevada StateBoard of Accountancy. The purpose of this Committee is to advise the Department regarding regulations, proceduresand forms for compliance with NRS 354.570 through 354.626 (Local Government Budget Act).

12

DEPARTMENT OF TAXATION ADMINISTRATION

Kannaiah Vadlakunta Sumiko Maser Paulina Oliver Terry RubaldDeputy Executive Director Deputy Executive Director Deputy Executive Director Deputy Executive Director

Information Technology Administrative Services Compliance Local Government Services

DEPARTMENT ORGANIZATION AND FUNCTION

Deonne E. ContineExecutive Director

Blake A. DoerrChief Deputy Executive Director

The Department maintains four office locations. The headquarters is located in Carson City, with district offices inHenderson, Las Vegas and Reno. For fiscal year 2013-14, the Department's staff consisted of 336 full-timeequivalent (FTE) positions statewide with a budget of $26,937,152.

Administrative Services/Fiscal is responsible for providing centralized support for all administrative, financial andfiscal activities of the Department. Sections include: Budget, Tax Distributions and Statistics, Revenue Accounting/Processing/ Cancellations, and Support Services/ Mailroom. Over $4 billion in revenue passes through this Divisionannually for distribution to the State General Fund, other State agencies, cities, counties and school districts.

Information Technology is responsible for the operation, maintenance and on-going enhancements to the UnifiedTaxation System (UTS) which includes the taxpayer facing web portal, Nevada Tax and the Discover Tax datawarehouse utilized by Compliance Division staff. In addition to the UTS, support is also provided for the officialwebsite for Taxation, the Department’s Intranet, statewide LAN/WAN and desktop applications.

Executive is comprised of the Director, who also acts as the secretary to the Nevada Tax Commission and the StateBoard of Equalization; Deputy Directors; Administrative Law Judges; Executive Review section; Internal Audit. Staffadministers taxpayer petitions and taxpayer hearings; and performs internal audit functions.

Compliance – Revenue/Collection section collects taxes from delinquent accounts; provides oversight andcollection of Sales and Use Taxes, the Modified Business Tax, the Business License Fee, Insurance Premium Tax,Cigarette Tax, Other Tobacco Tax, Liquor Tax, Lodging Tax, Live Entertainment Tax, Bank Excise Tax, Estate Tax,Short-term Auto Lease Fee, etc. It collects taxes on vehicles, vessels and aircraft based and licensed in Nevada;and performing discovery work in the field for unregistered businesses, and liquor and cigarette contraband. Inaddition, staff in this section actively collect accounts receivable; answer questions on taxability; conduct hearings;monitor accounts for compliance with statutes and reporting requirements; and provide general taxpayer education.

Local Government Services is responsible for appraising all centrally assessed property, establishing guidelines forthe county assessors, conducting the ratio study, ensuring statewide compliance with assessment standardsestablished by the Tax Commission and administering the Net Proceeds of Minerals tax and the Real PropertyTransfer tax. The Local Government Finance Section reviews local government budgets and audits, prepares the advalorem tax rates for certification, advises local governments on budget act compliance and financial managementmatters, and reviews entities' annual audits and plans to prevent the re-occurrence of violations as reported.

The Department of Taxation has five major divisions/sections: the Executive Division; the AdministrativeServices/Fiscal Division; Information Technology Division; Local Government Services Division; and the ComplianceDivision which consists of both the Revenue/Collection and Audit Sections. The Department acts as staff to theNevada Tax Commission, State Board of Equalization and Committee on Local Government Finance. In addition, theDepartment is also responsible for annually developing the official estimates of population of the State and thevarious counties, cities, towns and townships. These estimates, after certification by the Governor, are used todistribute certain revenues to counties, cities and towns and to determine the appropriate number of justices of thepeace.

13

Department Organization and Function (continued)

NET COLLECTIONSFISCAL YEAR NUMBER OF AUDITS FROM AUDIT BILLINGS

2008-09 1,397 16,180,0512009-10 1,254 14,977,7852010-11 1,066 16,168,5542011-12 950 12,742,0422012-13 767 14,983,5312013-14 1,198 21,791,869

GROSS SALES AND COLLECTIONS AS AUDITUSE TAXES % OF GROSS TAX COVERAGE

2008-09 3,122,729,836 0.52% 1.51%2009-10 2,968,104,048 0.50% 1.35%2010-11 3,142,104,568 0.51% 1.24%2011-12 3,344,395,525 0.38% 1.17%2012-13 3,535,753,246 0.42% 0.92%2013-14 3,685,074,611 0.59% 1.45%

Revenue officers also investigate possible tax evasion scenarios and they follow up on tips from the public. When working on a delinquent account the Revenue Officer may do skip tracing to locate individuals and, as the need arises, they may issue tax deficiency notices, set up payment plans, file liens and withholds and may close a business as a measure of last resort. This includes seizure of assets and subsequent sales of these assets to meet tax obligations. This section also contains the Taxpayer Service staff which answer questions by phone, correspondence and in person about registration, the taxability of transactions, and reporting requirements. The staff conducts workshops and provides general taxpayer education through publications and informational pamphlets.

Compliance - Audit section administers a comprehensive audit program to ensure taxpayer compliance. Thissection is responsible for ensuring financial compliance with laws relating to all of the above named taxes. In addition,audits are performed on various tax incentive programs to assure that the business qualifies for the incentive. Auditorsalso verify the accuracy of taxpayer credit or refund requests. The Audit section also uses discovery programs basedon comparisons of information from other taxing authorities. Audit staff also conduct taxpayer workshops on technicalissues and record keeping as well as on preparing for an audit.

The following is a comparison of Revenue and Audit statistics and sales and use tax activity for the last six fiscalyears:

The audit staff conducted 2,209 audits during Fiscal Year 2013-14; 1198 sales and use tax audits, 973 modifiedbusiness tax audits and 38 excise tax audits. The total net collections from audit billings during this period was$21,791,868.45. Audits billed may be collected in succeeding fiscal years, or set up on payment plans.

14

Department Financial Statement

REVENUES WORK PROGRAM

FUNDS REVENUES /

EXPENDITURES WORK PROGRAM

LESS ACTUAL

General Fund Appropriations 25,431,173$ 25,431,173$ -$ Audit Fees 23,002 33,034 (10,032) Cigarette Tax Administration 518,572 518,572 - Short Term Auto Lease Fee 9,933 10,816 (883) Administrative Fee Bad Check Charge 41,612 42,797 (1,185) Justice Court/Township Fees 107,988 88,661 19,327 Miscellaneous Revenue 29,391 52,285 (22,894) Student Fees Reimbursement 7,436 - 7,436 Interim Finance Committee Contingency Allocation 520,412 520,412 - Transfer from Silver State Health Exchange 19,919 - 19,919 Transfer from Dept. of Environmental Protection 7,201 8,695 (1,494) Master Settlement Agreement Reimbursement 220,513 220,513 - Total Revenues 26,937,152$ 26,926,958$ 10,194$

EXPENDITURESSalaries 20,853,964$ 20,853,463$ 501$ Out-of-State Travel 7,396 6,493$ 903 In-State Travel 179,424 155,819$ 23,605 Operating 2,410,895 2,406,340$ 4,555 Equipment 27,648 12,738$ 14,910 Compliance Audit Investigation 6,676 6,665$ 11 Out-of-State Audit 50,121 47,399$ 2,722 MSA Travel 34,289 29,715$ 4,574 E Payment Fees 15,954 15,209$ 745 Lockbox Program 1,152,872 985,174$ 167,698 Mining Oversight and Accountability Commission 17,050 2,946$ 14,104 Demographer 186,186 155,300$ 30,886 Cigarette Stamps 184,594 170,616$ 13,978 Information Services 1,579,966 1,520,424$ 59,542 Training 17,170 16,317$ 853 County Assessor/Appraiser Training 7,436 -$ 7,436 HR Cost Allocation 200,268 139,453$ 60,815 Purchasing Assessment 5,243 5,243$ - Total Expenditures 26,937,152$ 26,529,314$ 407,838$ Total Reversion, June 30, 2014 397,643 (397,643) Ending Revenue Authority 26,937,152$ 26,926,957$ 10,195$

REVERSIONS AND BALANCE FORWARDGeneral Fund - FY End Reversion -$ Balance Forward to IFC Contingency Allocation 397,643 Total Reversion 397,643$

REVENUES AND EXPENDITURESJULY 1, 2013 - JUNE 30, 2014

15

NRS TAX COUNTYCHAPTER RATE DESCRIPTION DISTRIBUTION IMPOSED

Minimum Statewide Tax Rate:

372 2.00% Sales Tax To the state General Fund ALL

374 2.60% Local School Support Tax In-State Business Returns: Tax is ALLdistributed to the school district in which thebusiness is located. Out-of-StateBusiness Returns: Tax is distributed to theState Distributive Schools Fund.

377 0.50% Basic City-County Relief Tax In-State Business Returns: Tax is distributed ALLto the county where the sale was made.Out-of-State Business Returns: Tax isdistributed to counties and cities basedon a population formula.

1.75% Supplemental City-County Relief Tax Tax is distributed to all qualifying local gov- ALL ernments according to statutory formula.

6.85% MINIMUM STATEWIDE TAX RATE

Option Taxes:

374A 0.125% Extraordinary maintenance, repair or Tax is distributed to the county where White Pineimprovement of schools. the sale was made.

377A 0.25% Promotion of Tourism - limited to Tax is distributed to the county where Storey counties with population of 400,000 or the sale was made. less. Operation & maintenance of a county swimming pool - limited to counties with population of less than 15,000. (voter approval)

377A 0.50% Public Mass Transportation; Construction Tax is distributed to the county where Carson City,max of Roads; Improvements to Air Quality the sale was made. Churchill,

(voter approval) Nye, andWhite Pine 0.25%;Washoe 0.375%,

Clark 0.5%

543 0.25% Control of Floods - limited to counties Tax is distributed to the county where Clark with population of 400,000 or more. the sale was made. (voter approval)

376A 0.25% Open Space - limited to counties with Tax is distributed to the county where population between 100,000 & 400,000. the sale was made. (voter approval)

354 0.25% Severe Financial Emergency - deter- Tax is distributed to the county where White Pine mined by Department of Taxation. the sale was made. 7/1/06 - 6/30/08 (Nevada Tax Commission approval)

377B 0.25% Infrastructure - limited to counties with Tax is distributed to the county where Churchill, Clark population less than 100,000 or greater the sale was made. Lander than 400,000. (county commission Lincoln, Lyon, approval) Pershing, Storey

White Pine

COMPONENTS OF SALES AND USE TAX RATES

16

Components of Sales and Use Tax RatesOption Taxes (continued)

NRS TAX COUNTYCHAPTER RATE DESCRIPTION DISTRIBUTION IMPOSED

377B 0.125% Infrastructure - limited to counties with Tax is distributed to the county where Carson population between 100,000 & 400,000. the sale was made. Washoe (county commission approval)

Special and Local Acts:

377.057 0.25% Local Government Tax Act - Washoe & Tax is distributed to the county where Churchill .25,Reviser's Churchill counties. (county commission the sale was made. Intracounty distribu- Washoe

Notes approval) tions to local governments are madeaccording to a statutory formula.

477 0.25% Tricounty Railway Commission - Carson Tax is distributed to the county where Storey City, Lyon & Storey counties. (voter the sale was made. approval) Effective 7/01 - name changed to NV Commission for Restoration of the V & T Railway - Douglas & Washoe counties representatives added to board

506 0.125% Washoe Railroad Grade Project. Tax is distributed to the county where Washoe (county commission approval) the sale was made.

14 1.00% Elko County Hospital Tax. (voter approval) Tax is distributed to the county where Elko the sale was made. vote failed

5/6/1997

16 0.25% Carson City Open Space Tax - Amend- Tax is distributed to the county where Carson CityCC ORD ment to Carson City Charter. (voter the sale was made.21.07.020 approval)

AB174 0.25% Douglas County Sales and Use Tax Act. Tax is distributed to the county where DouglasDO ORD (voter approval) the sale was made.99-877

SB208 0.25% This bill amended the language in NRS Tax is distributed to the county where White Pine 377A to provide for the voter approved the sale was made.

override to fund the operations & maintenance of a swimming pool.

SB273 0.25% This bill amended the language of NRS Tax is distributed to the county where 377A to provide for the voter approved the sale was made. override to fund improvements to air quality.

AB418 0.25% Clark County Sales & Use Tax Act of 2005 Tax is distributed to the county where Clarkthe sale was made.

SB74 0.25% This bill amended the language of NRS Tax is distributed to the county where Lyon, Pershing, 377B to provide funds for judicial and/or the sale was made. White Pine public safety infrastructure projects.

AB 461 0.50% Supports Public Safety Services Tax is distributed to the county where the NyeNYE ORD Nye County Sales & Use Tax Act of sale was made.

3.44 2007

17

LOCAL SALES AND USE TAX RATES AS OF 6/30/14

COUNTY RATE COUNTY RATE PROVISION

DATE IMPOSED

Carson City 0.250 377A Public Roads 1/1/1987Carson City 0.250 By Ordinance Open Space 7/1/1997

7.475 Carson City 0.125 377B V&T Railroad Bonds 4/1/2006Churchill 0.250 377A Public Roads 11/1/1986Churchill 0.250 377.057 Local Government Tax Act 10/1/1991

7.600 Churchill 0.250 377B Infrastructure 10/1/2005Clark 0.250 543 Flood Control 3/1/1987Clark 0.250 377A Regional Transportation 7/1/1991Clark 0.250 377B Southern NV Water Authority 4/1/1999Clark 0.250 377A Regional Transportation ¼% increase 10/1/2003

8.100 Clark 0.250 AB418 Police Support 10/1/20057.100 Douglas 0.250 AB174 Miscellaneous Facilities & Services 7/1/19997.100 Lander 0.250 377B Water Treatment 4/1/20047.100 Lincoln 0.250 377B School / Public Utilities 1/1/20017.100 Lyon 0.250 377B Infrastructure/Public Safety 10/1/20087.600 Nye 0.500 AB461 Public Safety 4/1/20147.600 Nye 0.250 377A Public Roads 5/1/19867.100 Pershing 0.250 377B Infrastructure/Public Safety 10/1/2008

Storey 0.250 377A Tourism 8/1/1985Storey 0.250 477 V & T Railroad Commission 1/1/1996

7.600 Storey 0.250 377B School / Public Utilities 1/1/2001Washoe 0.125 377A Regional Transportation 11/1/1982Washoe 0.250 377.057 Local Government Tax Act 10/1/1991Washoe 0.125 377B Flood/Public Safety 4/1/1999Washoe 0.125 506 Railroad Grade Project 4/1/1999

7.725 Washoe 0.250 377A Regional Transportation ¼% increase 7/1/2003White Pine 0.250 377A Public Roads 11/1/1986White Pine 0.125 374A School Capital Improvement 4/1/2000White Pine 0.250 377A Swimming Pool Maintenance 7/1/2012

7.725 White Pine 0.250 377B Infrastructure/Public Safety 10/1/2007

6.85 % Statewide rate applies to all other counties not listed.

USE OF PROCEEDS

18

CARSON CITY 55,441 HUMBOLDT COUNTY 17,384 Winnemucca 7,997 CHURCHILL COUNTY 25,238 Fallon 8,706 LANDER COUNTY 6,221

Austin 173 CLARK COUNTY 1,988,195 Battle Mountain 3,421 Boulder City 15,759 Kingston 124 Henderson 266,846 Las Vegas 589,156 LINCOLN COUNTY 5,100 Mesquite 16,778 Caliente 1,089 North Las Vegas 222,009 Alamo 583 Bunkerville 1,084 Panaca 832 Enterprise 162,872 Pioche 810 Indian Springs 1,192 Laughlin 8,414 LYON COUNTY 52,245 Moapa 1,086 Fernley 18,831 Moapa Valley 6,868 Yerington 3,094 Mt. Charleston 647 Paradise 184,745 MINERAL COUNTY 4,679 Searchlight 395 Spring Valley 184,910 NYE COUNTY 44,292 Summerlin 25,260 Amargosa 1,353 Sunrise Manor 196,570 Beatty 1,011 Whitney 38,910 Gabbs 271 Winchester 31,634 Manhattan 125

Pahrump 36,593 DOUGLAS COUNTY 48,015 Round Mountain 809 Gardnerville 5,495 Tonopah 2,552 Genoa 219 Minden 3,010 PERSHING COUNTY 7,013

Lovelock 1,936 ELKO COUNTY 51,771 Carlin 2,376 STOREY COUNTY 4,103 Elko 20,406 Wells 1,280 WASHOE COUNTY 427,704 West Wendover 4,367 Reno 229,859 Jackpot 914 Sparks 90,214 Montello 60 Mountain City 110 WHITE PINE COUNTY 9,945

Ely 4,066 ESMERALDA COUNTY 860 Lund 206 Goldfield 259 McGill 1,175 Silver Peak 128 Ruth 418

EUREKA COUNTY 2,011 Crescent Valley 370 Eureka 717 TOTAL STATEWIDE POPULATION 2,750,217

CERTIFIED POPULATION

Census population pursuant to NRS 360.285. The following population figures were used, as directed by specific statute, forallocation of tax revenue in fiscal year 2013-14.

19

SALES AND USE TAX REVENUE

FISCAL YEAR TAX PERMIT FEESTOTAL

COLLECTIONS% CHANGE FROM

PRIOR YEAR2008-09 844,003,992$ 79,858$ 844,083,850$ -12.68%2009-10 757,528,878 65,768 757,594,646 -10.25%2010-11 798,359,457 76,710 798,436,167 5.39%2011-12 845,610,765 67,093 845,677,857 5.92%2012-13 892,146,937 73,112 892,220,049 5.50%2013-14 934,883,717 77,319 934,961,036 4.79%

LEGAL CITATION Chapter 372 Nevada Revised Statutes.

RATE 2 percent on all taxable sales and taxable items of use.

CURRENT DISTRIBUTION OF REVENUE State General Fund.

ORIGINALLY ENACTED

RATE

REMOVAL OF SALES TAX FROM FOOD

DISTRIBUTION State General Fund since inception.

HISTORY

2 percent since inception. Referendum to raise to 3 percentdefeated in 1963 by 2 to 1 margin.

On June 5, 1979, the voters, by special election, amended theSales and Use Tax Act to provide for exemption of certain foodsfrom taxation (effective July 1, 1979).

1955 session of State Legislature. Approved by referendum in1956.

$500

$550

$600

$650

$700

$750

$800

$850

$900

$950

$1,000

2002-03 2003-04 2004-05 2005-06 2006-07

MILLIONS

FISCAL YEAR

$500

$600

$700

$800

$900

$1,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

20

Sales and Use Tax Revenue (continued)

COUNTY TAXES AND FEES % OF TOTAL

Carson City 16,087,047$ 1.72%Churchill 4,450,635 0.48%Clark 690,056,952 73.81%Douglas 11,949,514 1.28%Elko 28,604,448 3.06%Esmeralda 336,234 0.04%Eureka 6,250,603 0.67%Humboldt 15,626,591 1.67%Lander 5,691,485 0.61%Lincoln 575,795 0.06%Lyon 7,123,135 0.76%Mineral 1,019,490 0.11%Nye 10,636,046 1.14%Pershing 1,857,529 0.20%Storey 1,992,292 0.21%Washoe 124,071,077 13.27%White Pine 4,984,476 0.53%Out of State 6,338 0.00%STAR Bonds Transfers 3,641,348 0.39%

TOTAL 934,961,036$ 100.00%

STATE 2% SALES AND USE TAX COLLECTION BY COUNTYFISCAL YEAR 2013-14

21

LOCAL SCHOOL SUPPORT TAX REVENUE



PRIOR YEAR2008-09 919,541,400$ 79,860$ 919,621,260$ -12.91%2009-10 968,909,475 65,766 968,975,242 5.37%2010-11 1,030,710,402 76,712 1,030,787,113 6.38%2011-12 1,107,649,021 67,093 1,107,716,114 7.46%2012-13 1,172,121,826 73,112 1,172,194,938 5.82%2013-14 1,225,878,560 77,322 1,225,955,882 4.59%


RATE 2.60 percent on all taxable sales and taxable items of use.

CURRENT DISTRIBUTION OF REVENUE

ORIGINALLY ENACTED

RATE

99.25 percent of in-state collections returned to county of origin(location of the business) for distribution to school districts; .75percent to State General Fund. 99.25 percent of out-of-statecollections and other fees to State Distributive School Fund; .75percent to State General Fund.

1967 session of State Legislature. Held constitutional by NevadaSupreme Court, June 1967; effective July 1, 1967. Amended1981 session of State Legislature, effective May 1, 1981.Amended 1991 session of State Legislature, effective October 1,1991.

July 1, 1967 to April 30, 1981 - 1 percent on all taxable sales andtaxable items of use.

May 1, 1981 - 1.50 percent on all taxable sales and taxable items of use.

HISTORY

October 1, 1991 - 2.25 percent on all taxable sales and taxableitems of use.

July 1, 2009 - 2.60 percent on all taxable sales and taxable items of use.

$650

$750

$850

$950

$1,050

$1,150

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

MILLIONS

FISCAL YEAR

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

22

Local School Support Tax Revenue (continued)

DISTRIBUTION

COUNTY TAX % OF TOTAL

Churchill 5,130,124$ 0.42%Clark 832,511,729 67.91%Douglas 13,715,285 1.12%Elko 38,460,741 3.14%Esmeralda 118,340 0.01%Eureka 2,070,006 0.17%Humboldt 13,296,840 1.08%Lander 1,716,582 0.14%Lincoln 353,632 0.03%Lyon 8,774,339 0.72%Mineral 524,702 0.04%Nye 8,639,320 0.70%Carson City 17,600,970 1.44%Pershing 536,982 0.04%Storey 1,160,309 0.09%Washoe 151,070,968 12.32%White Pine 2,902,842 0.24%

Total County School District Distribution 1,098,583,712$ 89.61%

STAR Bonds Transfers 4,148,392 0.34%State General Fund 9,194,669 0.75%State Distributive School Fund 114,029,109 9.30%

TOTAL 1,225,955,882$ 100.00%

FISCAL YEAR 2013-14

July 1, 1967 to April 30, 1981 - 99 percent of in-state collectionsreturned to county of origin (location of the business) fordistribution to school districts. 1 percent to State General Fund.All out-of-state collections and other fees to State DistributiveSchool Fund.

May 1, 1981 - State General Fund Commission reduced to .50 percent.

October 1, 1991 - State General Fund Commission increased toinclude collections on out-of-state sales.

July 1, 1993 - State General Fund Commission increased from .50percent to 1 percent on in-state and out-of-state collections.

July 1, 1999 - State General Fund Commission decreased from 1percent to .75 percent on in-state and out-of-state collections.

LOCAL SCHOOL SUPPORT TAX DISTRIBUTION

23

BASIC CITY/COUNTY RELIEF TAX REVENUE



PRIOR YEAR2008-09 204,317,649$ 79,860$ 204,397,509$ -12.92%2009-10 186,830,759 65,771 186,896,530 -8.56%2010-11 198,464,101 76,710 198,540,811 6.23%2011-12 210,305,882 67,089 210,372,971 5.96%2012-13 222,386,664 73,125 222,459,788 5.75%2013-14 233,566,082 77,041 233,643,123 5.03%


RATE 1/2 of 1 percent of all taxable sales and taxable items of use.


ORIGINALLY ENACTED

1969 levied for city/county support. 99 percent of in-state collectionsreturned to county where the sale is made; 1 percent to State GeneralFund; 100 percent out-of-state collections prorated amongst countieslevying the tax; combined collections distributed as follows: if no citieswithin county, 100 percent to county; if one city within county, to countyand city, on basis of population ratio; if two or more cities within county,to cities only on basis of population ratio.

HISTORY

98.25 percent of in-state collections allocated to the county where thesale is made for distribution to eligible local governments through theConsolidated Tax Program; 1.75 percent to State General Fund; 98.25percent out-of-state collections prorated amongst counties, on thebasis of population ratio, for distribution to local governments throughthe Consolidated Tax Program; 1.75 percent to State General Fund.

1969 session of State Legislature as the City/County Relief Tax,effective July 1, 1969. Levy effected by county ordinance.

Collected in Clark and Washoe Counties as of July 1, 1969; LyonCounty, January 1, 1971; Douglas, Elko, Humboldt, Lincoln, MineralCounties, May 1, 1971; Nye County, June 1, 1972; Pershing County,July 1, 1972; Churchill County, July 1, 1973; Carson City, April 1, 1976;Storey County, July 1, 1976; Lander County, July 1, 1979; White PineCounty, July 1, 1980; Esmeralda and Eureka Counties, May 1, 1981.

$150

$175

$200

$225

$250

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

24

Basic City/County Relief Tax Revenue (continued)

AMENDMENTS 1981

1991

1993

1997

1999

2009


Carson City 4,112,718$ 1.76%Churchill 1,282,640 0.55%Clark 171,707,919 73.49%Douglas 3,182,649 1.36%Elko 6,179,688 2.64%Esmeralda 70,682 0.03%Eureka 1,189,879 0.51%Humboldt 3,417,104 1.46%Lander 1,229,430 0.53%Lincoln 141,412 0.06%Lyon 1,895,073 0.81%Mineral 240,748 0.10%Nye 2,475,067 1.06%Pershing 414,804 0.18%Storey 414,199 0.18%Washoe 29,569,544 12.66%White Pine 1,120,364 0.48%

Total County Transfers 228,643,920$ 97.86%STAR Bonds Transfers 910,449 1.75%State General Fund 4,088,755 0.39%Total 233,643,123$ 100.00%

FISCAL YEAR 2013-14

BASIC CITY/COUNTY RELIEF TAX TRANSFER

Effective July 1, 1993 General Fund Commission increased to 1 percent onin-state and out-of-state collections.

1981 session of State Legislature; name changed to Basic City/CountyRelief Tax effective May 1, 1981 and levy required by State Statute. May 1,1981 General Fund Commission reduced to .50 percent.

Effective October 1, 1991, .50 percent General Fund Commission wasimposed on out-of-state collections.

The 1997 Legislature created the Consolidated Tax Program. BeginningFY 98-99, the Department implemented the program that combinesBCCRT, SCCRT, Cigarette Tax, Liquor Tax, Real Property Transfer Taxand Motor Vehicle Privilege Tax into one monthly distribution. Totalallocation by county is transferred to the Consolidated Tax Account fordistribution to individual local governments within the county.

TO CONSOLIDATED TAX

Effective July 1, 1999 General Fund Commission decreased to .75 percenton in-state and out-of-state collections.

Effective July 1, 2009 General Fund Commission increased to 1.75 percenton in-state and out-of-state collections.

25

SUPPLEMENTAL CITY/COUNTY RELIEF TAX REVENUE

FISCAL YEAR TOTAL COLLECTIONS% CHANGE FROM

PRIOR YEAR2008-09 714,904,236$ -12.93%2009-10 654,046,992 -8.51%2010-11 694,656,373 6.21%2011-12 736,123,077 5.97%2012-13 778,573,683 5.77%2013-14 817,186,047 4.96%

LEGAL CITATION Chapter 377, Nevada Revised Statutes.Chapter 354, Nevada Revised Statutes.

RATE 1.75 percent of all taxable sales and taxable items of use.


ORIGINALLY ENACTED 1981 session of State Legislature; effective May 1, 1981.

AMENDMENTS 1983

1985

Fire districts organized pursuant to Chapter 473 of Nevada RevisedStatutes to be included in the distribution. Shifted authority to grantreserve fund distributions from the Interim Legislative Committee onLocal Government Finance to the Nevada Tax Commission.

98.25 percent of total collections returned to local governments throughConsolidated Tax Program based on distribution formula; 1.75 percentto State General Fund.

HISTORY

Changed distribution of excess supplemental city/county relief tax receipts. When all entities within a county have received the maximum supplemental city/county relief tax allowable, excess is then deposited in the Reserve Fund. Shifted authority to grant Reserve Fund distributions from the Nevada Tax Commission to the Interim Finance Committee. Established the following maximum Reserve Fund amounts: 1.) $10,000,000 for distribution to local governments in the event actual receipts in any one year are less than the estimated receipts for that year. 2.) $2,500,000 for emergency distributions to local governments if unforeseen or uncontrollable conditions, existing or imminent, substantially impair the financial capacity of a local government to provide the basic services for which it was created. 3.) Any amount in excess of $12,500,000 in the fund, at the beginning of the year, must be distributed to local governments in the following fiscal year.

$500

$600

$700

$800

$900

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

26

Supplemental City/County Relief Tax Revenue (continued)

AMENDMENTS (continued)

1987 Eliminated redevelopment districts from the distribution of supplementalcity/county relief tax.

1989 Removed the limitations on the amount of supplemental city/county relief tax alocal government may receive in any one fiscal year. Eliminated the Reserve

1991 Changed distribution of supplemental city/county relief tax at the county level.First a group of selected counties receive a guaranteed distribution from thetotal collections. The remaining funds are allocated to a second group ofcounties based on the percentage of county collections to the total collectionsfor the group. Adjustments to ease the impact of the legislation to certaincounties are made to the distribution formula. Counties in the guaranteedgroup will be moved into the point-of-origin group if their collections outpacetheir distribution by 10 percent in a fiscal year. Intracounty distributions werenot amended by the Legislature. The Local Government Tax Act of 1991authorized certain counties that were negatively impacted by the rebasing ofthe distribution formula to impose certain taxes to make up the revenue loss.

1993 The Local Government Tax Act of 1993 authorized certain counties that werenegatively impacted by additional rebasing of the distribution formula to imposecertain taxes to make up the revenue loss. These additional taxes, if imposed,are to be levied from October 1, 1993 through September 30, 1994.

Effective July 1, 1993 General Fund Commission increased to 1 percent on in-state and out-of-state collections.

1997 The 1997 Legislature created the Consolidated Tax Program. Beginning FY98-99, the Department implemented the program that combines BCCRT,SCCRT, Cigarette Tax, Liquor Tax, Real Property Transfer Tax and MotorVehicle Privilege Tax into one monthly distribution. Total allocation by countyis transferred to the Consolidated Tax Account for distribution to individuallocal governments within the county.

1999 Effective July 1, 1999 General Fund Commission decreased to .75 percent onin-state and out-of-state collections.

2009 Effective July 1, 2009 General Fund Commission increased to 1.75 percent onin-state and out-of-state collections.

27

Supplemental City/County Relief Tax Revenue (continued)


Carson City 14,117,173$ 1.73%Churchill 4,175,473 0.51%Clark 598,245,012 73.21%Douglas 13,607,159 1.67%Elko 22,097,298 2.70%Esmeralda 998,861 0.12%Eureka 4,478,807 0.55%Humboldt 12,538,254 1.53%Lander 2,494,438 0.31%Lincoln 1,072,856 0.13%Lyon 9,953,038 1.22%Mineral 1,462,320 0.18%Nye 8,182,803 1.00%Pershing 1,832,483 0.22%Storey 1,501,889 0.18%Washoe 100,393,316 12.29%White Pine 2,543,388 0.31%

Total County Transfers 799,694,566$ 97.86%STAR Bonds Transfers 3,186,181 0.39%State General Fund 14,305,300 1.75%TOTAL 817,186,047$ 100.00%

SEVERE FINANCIAL EMERGENCY FUND

Fund Balance - June 30, 2014 508,490$

SUPPLEMENTAL CITY/COUNTY RELIEF TAX TRANSFER

FISCAL YEAR 2013-14TO CONSOLIDATED TAX

28

Supplemental City/County Relief Tax (continued)

LOCAL GOVERNMENT TAX ACTS OF 1991 AND 1993SPECIAL FUND COLLECTIONS AND DISTRIBUTIONS

FISCAL YEAR 2013-14

CHURCHILL COUNTY WASHOE COUNTY Sales and Use Tax 509,490$ Sales and Use Tax 15,344,741$ Government Services Tax 586,454 Government Services Tax 115 Real Property Transfer Tax 12,897 Gaming License Fee 49,313 Property Tax 160,947 Real Property Transfer Tax 718,121 Interest 235 Property Tax 3,368,425

TOTAL 1,270,024$ Interest 4,313 TOTAL 19,485,027$

CHURCHILL COUNTY 972,655$ WASHOE COUNTY 12,988,599$ Fallon 226,488 Reno 3,011,910 Other 70,881 Sparks 1,485,542

TOTAL 1,270,024$ Other 1,998,976 TOTAL 19,485,027$

COLLECTIONS

DISTRIBUTIONS

29

LOCAL OPTION SALES AND USE TAX


PRIOR YEAR2008-09 439,722,982$ -13.35%2009-10 401,635,601 -8.66%2010-11 419,684,048 4.49%2011-12 444,505,505 5.91%2012-13 470,304,788 5.80%2013-14 502,729,113 6.89%

LEGAL CITATION Chapters 374A, 377A, 377B and 543 Nevada Revised Statutes.

RATE


ORIGINALLY ENACTED

0.125 or 0.25 percent of all taxable sales and taxable items of use in acounty.

NRS 374A provides for a county to impose a tax up to one-eighth of onepercent for the cost of extraordinary maintenance, repair or improvementof school facilities within the county. Per NRS 377A.020, the board ofcounty commissioners may impose a tax of .25 percent for mass transitor the construction of public roads; or counties with population of lessthan 400,000 may impose a .25 percent tax for the promotion of tourism.NRS 377B.100 provides that a county, under certain populationrequirements, may impose up to .25 percent tax for infrastructure; NRS543.600 provides that a county whose population is 400,000 or moremay impose a .25 percent tax for the purpose of flood control. 98.25percent of collection returned to county of origin; 1.75 percent to StateGeneral Fund. Special Acts of the Legislature have provided for certaincounties to impose additional option taxes for specific local purposes.

HISTORY

1981 session of State Legislature. Washoe County enacted ordinanceeffective November 1, 1982; Storey County effective August 1, 1985;Nye County effective May 1, 1986; Churchill and White Pine Countieseffective November 1, 1986; Carson City effective January 1, 1988; andClark County effective March 1, 1988.

$150

$250

$350

$450

$550

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

30

Local Option Sales and Use Tax (continued)

AMENDMENTS 1985

1989

1991

1993

1995

1997

1999

2003

2005

2007

2009

Effective July 1, 1993 General Fund Commission increased to 1 percent on in-state and out-of-state collections.

Amended NRS 377A.020 by adding that the tax may be used for theconstruction of public roads, and NRS 543.600 stipulates for the purpose offlood control.

Amended NRS 543.600 by increasing the population limitation from 250,000 to400,000 or more in a county that may consider imposing a tax for flood control.

Implemented the Local Government Tax Act of 1991, AB 104 authorizingcertain counties that were negatively impacted by the change to theSupplemental County/City Relief Tax distribution formula to impose by countyordinance an additional ¼ of 1 percent sales and use tax.

Implemented the Local Government Tax Act of 1993, SB 506 authorizingcertain additional counties that were negatively impacted by additional changesto the Supplemental City/County Relief Tax distribution formula to impose bycounty ordinance ¼ of 1 percent sales and use tax from October 1, 1993through September 30, 1994.

Effective July 1, 2009 General Fund Commission increased to 1.75 percent on in-state and out-of-state collections.

Allowed the Tri-County Railway Commission to impose ¼ of 1 percent salesand use tax in a county upon approval of the voters.

Ratified Carson City voter approval imposition of ¼ of 1 percent sales and usetax for open space. Added chapter 377B, tax for infrastructure to NevadaRevised Statutes.

Added Chapter 374A, 1/8 of 1 percent tax for extraordinary maintenance,repair or improvement of school facilities.

Added NRS 377A.062 that the tax for miscellaneous purposes may be used tosupport the operation and maintenance of a county swimming pool.

Passed the Clark County Sales and Use Tax Act of 2005. The revenues are tobe used to employ and equip additional police officers.

Amended Chapter 377B to allow the tax for infrastructure to be used for theconstruction or renovation of facilities having cultural or historical value. Alsoallows the tax to be used for the maintenance and operation of wastewatertreatment facilities.

Amended Chapter 377B to allow the tax for infrastructure to be used for judicialand/or public safety infrastructure projects.

Effective July 1, 1999 General Fund Commission decreased to .75 percent onin-state and out-of-state collections.

31

Local Option Sales and Use Tax (continued)

COUNTY PROVISION DATE IMPOSED AMOUNTOption TaxesCarson City 377A Public Roads 1/1/1987 1,975,846$ Carson City 377B V&T Railroad Bonds 4/1/2006 987,944 Churchill 377A Public Roads 11/1/1986 509,451 Churchill 377B Infrastructure 10/1/2005 509,452 Clark 377A Regional Transportation 7/1/1991 170,297,996 Clark 377A Regional Transportation ¼% increase 10/1/2003Clark 377B So NV Water Authority 4/1/1999 85,125,747 Clark 543 Flood Control 3/1/1987 85,126,634 Lander 377B Water Treatment 4/1/2004 708,397 Lincoln 377B School / Public Utilities 1/1/2001 70,670 Lyon 377B Infrastructure 10/1/2008 873,874 Nye AB461 Public Safety 4/1/2014 607,559 Nye 377A Public Roads 5/1/1986 1,220,254 Pershing 377B Infrastructure 10/1/2008 228,177 Storey 377A Tourism 8/1/1985 226,225 Storey 377B School / Public Utilities 1/1/2001 226,225 Washoe 377A Regional Transportation 11/1/1982 23,016,997 Washoe 377A Regional Transportation ¼% increase 7/1/2003Washoe 377B Flood/Public Safety 4/1/1999 7,672,379 White Pine 374A School Cap Improvement 4/1/2000 305,009 White Pine 377A Public Roads 11/1/1986 610,015 White Pine 377A Swimming Pool 10/1/2003 609,963 White Pine 354 Operating/Severe Fin. Emergency 7/1/2006 510 White Pine 377B Infrastructure/Public Safety 10/1/2007 609,508 Special ActsChurchill Local Government Tax Act 10/1/1991 509,490 Clark Police Support 10/1/2005 85,213,574 Storey Tricounty Railway Commission 1/1/1996 226,225 Washoe Railroad Grade Project 4/1/1999 7,672,343 Washoe Local Government Tax Act 10/1/1991 15,344,741 Miscellaneous AmendmentsCarson City Open Space 7/1/1997 1,975,849 Douglas Misc Facilities & Services 7/1/1999 1,470,298

Total to Counties 493,931,354$ State General Fund 8,797,760 TOTAL 502,729,113$

USE OF PROCEEDS

LOCAL OPTION SALES AND USE TAX DISTRIBUTION FISCAL YEAR 2013-14

32

STAR BOND REVENUE

FISCAL YEAR TOTAL REVENUE% CHANGE FROM

PRIOR YEAR2008-09 5,529,823$ 194.91%2009-10 7,453,708 34.79%2010-11 9,476,247 27.13%2011-12 9,096,674 -4.01%2012-13 11,764,387 29.33%2013-14 12,055,545 2.47%

LEGAL CITATION Chapter 271A, Nevada Revised Statutes.


ORIGINALLY ENACTED

AMENDMENTS 2009

2013 Senate Bill 406 exempts the Local School Support Tax from beingpledged for any Tourism Improvement Districts created or revisedafter July 1, 2013. It also revises the requirements for contractorsand subcontractors operating within the district.

Effective July 1, 2009 General Fund Commission increased to 1.75percent on in-state and out-of-state collections for Sales and UseTax and City-County Relief Tax.

Up to 75 percent of the Sales and Use Tax generated in a TourismImprovement District may be pledged toward the repayment of thebonds. The pledge does not include Local Option Sales and UseTaxes, or any amount above 2.25 percent of the Local SchoolSupport Tax rate. 1.75 percent commission to the State GeneralFund for Sales and Use Tax and City-County Relief Tax; 0.75percent commission to the State General Fund for Local SchoolSupport Tax.

HISTORY

2005 session of State Legislature. Became effective July 1, 2005.

The statute provides the means for municipalities to create TourismImprovement Districts. The taxable sales generated in these districts may be pledged toward the payment of bonds issued by themunicipality to finance projects in the districts.

$-

$2

$4

$6

$8

$10

$12

$14

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

33

TAXABLE SALES COMPARISON

Taxable Sales Comparison by County

County Fiscal Year 2012-13 Fiscal Year 2013-14 % Change

Carson City 779,297,546$ 804,368,288$ 3.2%Churchill 387,569,985 252,675,060 -34.8%Clark 32,566,664,630 35,040,891,695 7.6%Douglas 592,823,014 599,622,888 1.1%Elko 1,595,351,240 1,426,133,202 -10.6%Esmeralda 19,805,714 16,826,290 -15.0%Eureka 370,492,295 315,756,504 -14.8%Humboldt 921,111,867 780,774,261 -15.2%Lander 440,677,027 302,690,758 -31.3%Lincoln 30,054,836 29,501,410 -1.8%Lyon 305,525,152 356,889,794 16.8%Mineral 66,463,083 62,661,227 -5.7%Nye 832,076,991 624,760,653 -24.9%Pershing 96,442,298 94,632,842 -1.9%Storey 77,728,883 108,434,066 39.5%Washoe 5,824,726,136 6,370,684,534 9.4%White Pine 296,597,716 253,041,695 -14.7%

STATE TOTAL 45,203,408,413$ 47,440,345,167$ 4.9%

The above comparisons for Fiscal Year 2012-13 and Fiscal Year 2013-14 on Taxable Sales are based on figures provided on Sales and Use Tax returns by registered permit holders in and out of the State of Nevada. Large increases or decreases may be due to audits, deficiency determinations, etc., performed on taxpayers doing business in a county.

34

CONSOLIDATED TAX


PRIOR YEAR2008-09 1,093,819,175$ -12.83%2009-10 989,505,534 -9.54%2010-11 1,031,977,833 4.29%2011-12 1,079,514,363 4.61%2012-13 1,137,222,344 5.35%2013-14 1,196,313,869 5.20%

LEGAL CITATION Chapter 360, Nevada Revised Statutes.


ORIGINALLY ENACTED

HISTORY

1997 session of State Legislature created the Local Government TaxDistribution Fund.

For counties, cities, towns and special districts, the lesser of prior yeartotal distribution or prior year base is increased by the change in CPIover the prior calendar year to create the ensuing year base allocation.To the extent that there is revenue (from the six sources) in excess ofwhat is necessary to allocate the base amount to the various localgovernments, the excess revenue will be distributed using a formula thatincorporates population and growth statistics. "Enterprise" districts (user-fee based entities) initial base distribution is the amount that will bedistributed for all subsequent fiscal years.

Per NRS 360.600 through NRS 360.740; Revenues from theSupplemental City-County Relief Tax (SCCRT), Basic City-County ReliefTax (BCCRT), Cigarette Tax, Liquor Tax, Government Services Tax(GST) and Real Property Transfer Tax (RPTT) are pooled at the countylevel for distribution to the local governments under a single formula.

A base amount of revenue was initially established under the 1997legislation. For counties, cities, towns and special districts, the totaldistribution is increased by the change in CPI over the prior calendaryear to create the ensuing year base allocation.

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

35

Consolidated Tax (continued)

AMENDMENTS 2001

2005 SB 38 provides an additional method for calculating the excess amountof the base monthly amount to be allocated to local governments inwhich: (1) the average amount of the assessed valuation of taxableproperty attributable to the net proceeds of minerals over the preceding 5fiscal years is at least $50 million; (2) the average percentage of changein the population over the preceding 5 fiscal years is a negative figure; or(3) both. The bill applied retroactively to January 1, 2005, but did notaffect money previously distributed to local governments.

The City of Henderson received a one time base increase of $4,000,000.

For counties, cities, towns and special districts, the lesser of prior yeartotal distribution or prior year base is increased by the change in CPIover the prior calendar year to create the ensuing year base allocation.

"One Plus" component of excess distribution to be phased out over thenext 4 years.

36

COUNTY BCCRT SCCRT CIGARETTE LIQUOR RPTT GST TOTAL

CARSON CITY 4,112,718$ 14,117,173$ 219,061$ 72,496$ 288,237$ 1,950,913$ 20,760,596$ CHURCHILL 1,282,640 4,175,473 99,722 33,002 70,934 1,032,227 6,693,996 CLARK 171,707,919 598,245,012 7,855,848 2,599,797 19,536,319 88,298,746 888,243,641 DOUGLAS 3,182,649 13,607,159 189,719 62,785 707,387 2,150,585 19,900,285 ELKO 6,179,688 22,097,298 204,560 67,697 277,359 3,941,127 32,767,729 ESMERALDA 70,682 998,861 3,398 1,125 20,336 143,927 1,238,328 EUREKA 1,189,879 4,478,807 7,946 2,630 9,091 284,367 5,972,720 HUMBOLDT 3,417,104 12,538,254 68,688 22,732 93,428 1,448,679 17,588,884 LANDER 1,229,430 2,494,438 24,581 8,135 22,301 664,168 4,443,052 LINCOLN 141,412 1,072,856 20,151 6,669 11,874 370,921 1,623,883 LYON 1,895,073 9,953,038 206,433 68,316 385,354 2,287,504 14,795,718 MINERAL 240,748 1,462,320 18,488 6,118 7,911 344,188 2,079,774 NYE 2,475,067 8,182,803 175,009 57,917 174,934 2,167,558 13,233,286 PERSHING 414,804 1,832,483 27,710 9,170 17,263 498,254 2,799,685 STOREY 414,199 1,501,889 16,212 5,365 72,196 284,923 2,294,785 WASHOE 29,569,544 100,393,316 1,689,964 559,273 3,949,713 21,168,129 157,329,939 WHITE PINE 1,120,364 2,543,388 39,295 13,004 31,495 800,021 4,547,567

TOTAL 228,643,920$ 799,694,566$ 10,866,785$ 3,596,230$ 25,676,132$ 127,836,236$ 1,196,313,869$

RPTT: Each county treasurer deposits to the Consolidated Tax Account, at least quarterly the revenue collected within the county.GST: Revenue for each county is transferred monthly to the Consolidated Tax Account by the Department of Motor Vehicles.

FISCAL YEAR 2013-14SUMMARY OF THE REVENUE TRANSFERRED BY COUNTY

CONSOLIDATED TAX

BCCRT, SCCRT, Cigarette and Liquor taxes: Revenue for each county is transferred monthly to the Consolidated Tax Account by the Department of Taxation.

37

CARSON CITY 20,734,059$ LANDER COUNTY 3,504,035$ Other 26,538 Other 939,018

TOTAL 20,760,596$ TOTAL 4,443,052$

CHURCHILL COUNTY 5,002,842$ LINCOLN COUNTY 1,186,255$ Fallon 1,433,385 Caliente 133,116 Other 257,770 Other 304,513

TOTAL 6,693,996$ TOTAL 1,623,883$

CLARK COUNTY 309,993,448$ LYON COUNTY 13,073,048$ Boulder City 9,303,868 Fernley 137,036 Henderson 88,015,763 Yerington 378,616 Las Vegas 245,704,996 Other 1,207,018 Mesquite 7,227,843 TOTAL 14,795,718$ North Las Vegas 43,978,232 Other 184,019,491 MINERAL COUNTY 1,965,048$

TOTAL 888,243,641$ Other 114,726 TOTAL 2,079,774$

DOUGLAS COUNTY 10,608,318$ Other 9,291,967 NYE COUNTY 11,187,656$

TOTAL 19,900,285$ Other 2,045,630 TOTAL 13,233,286$

ELKO COUNTY 13,567,194$ Carlin 1,684,453 PERSHING COUNTY 2,124,726$ Elko 12,152,780 Lovelock 398,191 Wells 1,074,938 Other 276,768 West Wendover 2,437,088 TOTAL 2,799,685$ Other 1,851,274

TOTAL 32,767,729$ STOREY COUNTY 2,293,994$ Other 791

ESMERALDA COUNTY 1,193,053$ TOTAL 2,294,785$ Other 45,275

TOTAL 1,238,328$ WASHOE COUNTY 80,669,560$ Reno 46,379,586

EUREKA COUNTY 5,901,058$ Sparks 19,326,379 Other 71,662 Other 10,954,413

TOTAL 5,972,720$ TOTAL 157,329,939$

HUMBOLDT COUNTY 11,318,724$ WHITE PINE COUNTY 3,036,287$ Winnemucca 4,267,559 Ely 1,055,357 Other 2,002,602 Other 455,923

TOTAL 17,588,884$ TOTAL 4,547,567$

TOTAL DISTRIBUTION 1,196,313,869$

CONSOLIDATED TAX DISTRIBUTIONFISCAL YEAR 2013-14

38

BUSINESS LICENSE FEE


PRIOR YEAR2008-09 22,516,702$ 15.08%2009-10 4,417,943 -80.38%2010-11 335,542 -92.41%

2011-12 * 257,812 -23.17%2012-13 335,780 30.24%2013-14 244,905 -27.06%

* Note: Fiscal year 2011-12 total collections has been adjusted due to additional information received.

LEGAL CITATION Chapter 360.760 - 360.796, Nevada Revised Statutes

IMPOSITION AND RATE


ORIGINALLY ENACTED

AMENDMENTS

Amended effective October 1, 2009 by Assembly Bill 146 of the 75th Session of the Nevada Legislature. Assembly Bill 146 transferred the administration of the Business License fee from the Department of Taxation to the Nevada Secretary of State. The administration of the Exhibition Facilities fee remains with the Department of Taxation.

Amended effective July 1, 2005 by the 22nd Special Session of the Nevada Legislature to include a fee for Exhibition Facilities. If paid annually, the fee is $5,000. If paid quarterly, the fee is equal to the total number of businesses taking part in each exhibition at the facility who do not have a state business license, multiplied by the number of days on which the exhibition is held, multiplied by $1.25.

Business License Fee is $200 annually, effective July 1, 2009. This is afee imposed on persons doing business in Nevada.

HISTORY

2003 Legislative Session, effective October 1, 2003. This is a licensefee imposed on a person for the privilege of conducting business in thisstate. This business license replaces the business license requirementin 364A, which was repealed September 30, 2003.

$-

$5.0

$10.0

$15.0

$20.0

$25.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

1

MODIFIED BUSINESS TAX

FISCAL YEAR

GENERAL BUSINESS

FINANCIAL INSTITUTIONS

ECONOMIC DEVELOPMENT

TOTAL COLLECTIONS

% CHANGE FROM PRIOR YEAR

2008-09 253,118,726.99$ 24,397,565.55$ -$ 277,516,292.54$ -2.49%2009-10 363,411,521 21,698,267 9,921 385,119,708 38.77%2010-11 361,355,326 20,545,331 39,986 381,940,643 -0.83%2011-12 348,943,337 20,717,296 138,697 369,799,330 -3.18%2012-13 363,242,006 23,368,075 120,895 386,730,976 4.58%2013-14 361,095,880 23,789,898 135,167 385,020,945 -0.44%

LEGAL CITATION Chapter 363A, 363B

IMPOSITION AND RATE

ORIGINALLY ENACTED

HISTORY

Tax is imposed on businesses and financial institutions. For businesses other than financial institutions the tax rate is 1.17 percent after health care deductions if the sum of all wages exceeds $85,000 for the calendar quarter. The tax rate for financial institutions is 2% of the gross wages paid by the employer during the calendar quarter. There is an allowable deduction from the gross wages for amounts paid by the employer for qualified health insurance or a qualified health benefit plan. The tax is due on or before the last day of the month immediately following the calendar quarter.

2003 Special Session of the State Legislature, effective July 1, 2003. This tax replaces the Business Tax under NRS 364A which was repealed September 30, 2003.


Tax collected is distributed to the State General Fund. 50% of the tax paid by an entity which was directly recruited/assisted in locating to Nevada by a qualifying economic development agency is distributed back to that agency for a period of 10 years pursuant to NRS 363B.105.

$-

$100

$200

$300

$400

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

40

Modified Business Tax (continued)

AMENDMENTS

Assembly Bill 561 of the 2011 Session of the State Legislature changed the rate to 1.17% on taxable wages paid above $62,500 in a calendar quarter. There is no tax on wages paid which are less than $62,500 in a calendar quarter. The new rate applies from July 1, 2011 through June 30, 2013.

Senate Bill 429 of the 2009 Session of the State Legislature changed the tax to a two-tiered rate for General Businesses. The rate on the first $62,500 of taxable wages is 0.5%; wages above $62,500 are taxed at 1.17%. The rate for Financial Institutions was not changed.

Assembly Bill 317 of the 2009 Session of the State Legislature provides for a 50% distribution of Modified Business Tax paid by a business for a period of 10 years to a redevelopment agency that is responsible for locating a business in the state between July 1, 2009 and June 30, 2011.

The 2003 Special Session of the State Legislature set the initial tax rate of 0.7 percent for general businesses, effective July 1, 2003 through June 30, 2004. The rate decreased to 0.65 percent effective July 1, 2004 through June 30, 2005. The rate for general businesses decreased to 0.63 percent effective July 1, 2005.

41

LIVE ENTERTAINMENT TAX

FISCAL YEARLESS THAN 7500

SEATS7500 SEATS OR

GREATERTOTAL


PRIOR YEAR2008-09 8,226,114.78$ 936,154.44$ 9,162,269.22$ -10.01%2009-10 10,442,433 1,033,086 11,475,519 25.25%2010-11 11,088,275 1,011,012 12,099,287 5.44%2011-12 10,576,990 1,067,201 11,644,191 -3.76%2012-13 10,689,221 1,017,449 11,706,670 0.54%2013-14 14,977,815 1,158,358 16,136,173 37.84%

LEGAL CITATION Chapter 368A

IMPOSITION AND RATE


HISTORY

ORIGINALLY ENACTED

AMENDMENTS

Amended by the 2007 Session of the State Legislature to exemptminor league baseball games from the tax.

A tax imposed on any facility with 200 or more seats where liveentertainment is provided and admission is charged. TheDepartment of Taxation is only responsible for collecting this taxfrom non-gaming facilities. For facilities seating more than 200 and less than 7500, the rate is 10 percent of the admission charge plus10 percent of any amount paid for food, refreshments andmerchandise purchased at the facility. For facilities seating morethan 7,500 the rate of tax is 5 percent of the admission charge.

2003 Session of the State Legislature, effective January 1, 2004.

Amended by the 2005 Session of the State Legislature to reducethe minimum occupancy to 200 seats, and to exempt NASCARNextel Cup races from the tax effective July 1, 2007.

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

2003-04 2004-05 2005-06 2006-07

THOUSANDS

QUARTER

$5.0

$7.0

$9.0

$11.0

$13.0

$15.0

$17.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

42

BANK EXCISE TAX

FISCAL YEARTOTAL

COLLECTIONS

% CHANGE FROM PRIOR FISCAL

YEAR2008-09 3,131,495$ -0.35%2009-10 3,378,900 7.90%2010-11 3,074,089 -9.02%2011-12 3,047,528 -0.86%2012-13 2,996,521 -1.67%2013-14 2,788,166 -6.95%

LEGAL CITATION Chapter 363A.120 Nevada Revised Statutes.

IMPOSITION AND RATE

State General Fund.

ORIGINALLY ENACTED 2003 Session of the State Legislature, effective January 1, 2004.

AMENDMENTS

A tax imposed on each bank at the rate of $1,750 for each branchoffice in excess of one maintained by the bank in any county in thisState on the first day of each calendar quarter. Each bank thatmaintains more than one branch office in any county in this State onthe first day of a calendar quarter shall make quarterly tax paymentsdue on or before the last day of the first month of that calendar quarter.

HISTORY


2005 Special Session of the State Legislature amended the language to impose the tax on the number of branch offices in each county in excess of one branch per county.

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

43

INSURANCE PREMIUM TAX

FISCAL YEARTOTAL


PRIOR YEAR2008-09 238,622,626$ -7.08%2009-10 227,959,135 -4.47%2010-11 227,943,702 -0.01%

2011-12* 230,099,206 0.95% 2012-13** 240,559,705 4.55%2013-14 254,628,201 5.85%

* Total Collections include $429,957.86 in out-of-statute credits transferred to the State General Fund** Total Collections do not include $8,646.31 in out-of-statute credits reversed from the State General Fund

LEGAL CITATION Chapter 680B Nevada Revised Statutes.

IMPOSITION AND RATE


ORIGINALLY ENACTED 1933 session of the State legislature.

AMENDMENTS

A tax imposed for the privilege of transacting business in this State.Each insurer shall pay a tax upon his net direct premiums and net directconsiderations written, at the rate of 3.5 percent. The premium tax isdue on March 15 of each year on premiums written in the prior calendaryear. Insurers required to pay a tax of at least $2,000 the precedingcalendar year must pay quarterly tax payments based on actual netdirect premiums and net direct considerations written for the currentreporting quarter. An insurer is entitled to a "Home Office Credit" of 50percent of the aggregate amount of tax due and full credit for ad valorem taxes paid by the insurer during the preceding calendar year if theinsurer maintains a home office or regional home office in Nevada.Other stipulations apply. These credits cannot exceed 80 percent of thetax otherwise due.

1993 session of the State Legislature transferred the function of taxcollection to the Department of Taxation from the Department ofInsurance effective July 1, 1993 per AB 782.

HISTORY

$140

$160

$180

$200

$220

$240

$260

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

44

Insurance Premium Tax (continued)


2005 Session of the State Legislature lowered the tax rate for RiskRetention Groups from 3.5 percent to 2 percent, effective June 17,2005.

1997 Session of the State Legislature changed the due date of theannual return from March 1st to March 15th and requires insurers toreport premium taxes based on actual premiums written instead ofestimated, effective January 1, 1998.

1999 Session of the State Legislature requires insurers to providestatements to insureds if the portion of premium is attributable to thegeneral premium tax, fees or assessments, effective July 1, 2000.

1995 Session of the State Legislature passed legislation requiringprivate insurers who are writing industrial insurance in this State to paypremium tax on those policies. The legislation also provided for a creditagainst premium taxes on industrial insurance policies in an amountequal to the assessment paid by the insurer to the Division of IndustrialRelations, effective July 1, 1999.

45

CIGARETTE AND OTHER TOBACCO PRODUCTS TAX REVENUE

FISCAL YEARSTAMP

REVENUE

OTHER TOBACCO

PRODUCTS LICENSESTOTAL

COLLECTIONS

% CHANGE FROM PRIOR

YEAR2008-09 110,842,179 9,140,387 12,150 119,994,716 -11.14%2009-10 101,200,980 9,574,952 10,688 110,786,619 -7.67%2010-11 98,241,257 10,039,228 10,574 108,291,059 -2.25%2011-12 94,828,403 8,274,310 9,563 103,112,276 -4.78%2012-13 94,877,145 10,348,437 9,900 105,235,482 2.06%2013-14 90,091,404 11,620,286 9,717 101,721,406 -3.34%

FISCAL YEAR

# OFREVENUE STAMPS

% CHANGE FROM PRIOR

YEAR FISCAL YEAR

# OFREVENUE STAMPS

% CHANGE FROM PRIOR

YEAR2008-09 139,306,800 12.95% 2011-12 117,511,200 -4.72%2009-10 127,043,100 -8.80% 2012-13 119,071,200 1.33%2010-11 123,332,700 -24.08% 2013-14 114,233,400 -4.06%

NOTE: The tax represents stamps paid for, penalty and interest, and Use Tax paid by manufacturers on gift or sample cigarettes. Revenue stamps represent the number of paid stamps, issued by the Department.

$-

$20

$40

$60

$80

$100

$120

$140

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

100

115

130

145

160

175

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

REVENUE STAMPS ISSUED

46

Cigarette and Other Tobacco Products Tax Revenue (continued)


RATE Cigarettes - 40 mills per cigarette. Other Tobacco Products - 30 percent ofmanufacturers wholesale price.

CURRENT DISTRIBUTION OF REVENUE 5 mills per cigarette for distribution to eligible local governments (lessadministrative fee determined by legislative appropriation) through theConsolidated Tax distribution.

35 mills per cigarette to the State General Fund. Other Tobacco Productsrevenue to the State General Fund.

ORIGINALLY ENACTED 1947 session of State Legislature.

RATE 1947 - 1949, 2 cents; 1949 - 1961, 3 cents; 1961 - 1969, 7 cents; 1969 toJune 30, 1983, 10 cents; July 1, 1983 to June 30, 1985, 15 cents perpackage; July 1, 1985 to June 30, 1987, 7.5 mills per cigarette; July 1, 1987to June 30, 1989, 10 mills per cigarette; July 1, 1989, 17.5 mills percigarette; July 22, 2003, 40 mills per cigarette.

AMENDMENTS 1947 Wholesalers' discount 10 percent for stamping; 5 percent for administration;remainder to State General Fund.

1949 Wholesalers' discount reduced to 7 percent; revenue distribution, 87.5percent to State General Fund; 12.5 percent to counties.

1953 Effective date of Use Tax on cigarettes.

1955 Wholesalers' discount for stamping reduced to 5 percent.

1960 Refunds allowed for tax paid on stale cigarettes.

1961 Wholesalers' stamping discount, 4 percent; revenue distribution, 66 percentto State General Fund; 28.5 percent to cities and counties based onpopulation; 5.5 percent to counties based on sales.

1965 Revenue distribution changed - 30 percent to State General Fund; 64.5percent to cities and counties based on population; 5.5 percent to countiesbased on county sales.

1967 Revenue distribution changed - 100 percent local.

No cities - 100 percent to county.

One city - based on population - county and city.

Two or more cities - to cities based on population.

1969 Administrative costs reimbursed in amount determined by legislativeappropriation each biennium.

HISTORY

47


AMENDMENTS (continued) 1980 June 10, 1980 - Supreme Court decision of Washington vs. Coleville IndianReservation determined that State cigarette tax could not be applied to on-reservation transactions. Effective July 16, 1980 cigarettes sold to and byeligible Indian smoke shops required tribal cigarette stamps or meteredimpressions on packages sold. In 1980 the Department of Taxationfurnished 13,091,470 tribal stamps. In more recent years the Departmenthas furnished the following number of tribal stamps: FY 2008-09 30,892,500 FY 2011-12 25,440,000FY 2009-10 28,035,000 FY 2012-13 22,935,000FY 2010-11 27,315,000 FY 2013-14 20,115,000

1983 The 1983 session of the State Legislature enacted an additional 5 cent perpack tax for distribution to the State General Fund. In addition, all productsmade from tobacco, other than cigarettes, are taxed at 30 percent of themanufacturers wholesale price for distribution to the State General Fund.

1985 The 1985 session of the State Legislature enacted a tax base change; to 7.5mills per cigarette but not less than 15 cents per package.

1987 The 1987 session of the State Legislature enacted a tax rate change; to 10mills per cigarette but not less than 20 cents per package.

1989 The 1989 session of the State Legislature enacted a tax rate change; to 17.5mills per cigarette.

1991 Wholesalers' discount for stamping reduced from 4 percent to 3 percent.

1997 Monthly reports required from wholesale and retail dealers of other tobaccoproducts.

Other tobacco products displayed or exhibited at trade show exempt fromexcise tax.

The 1997 Legislature created the Consolidated Tax Program. Beginning FY1998-99, the Department implemented the program that combines BCCRT,SCCRT, Cigarette Tax, Liquor Tax, Real Property Transfer Tax and MotorVehicle Privilege Tax into one monthly distribution. Total allocation bycounty is transferred to the Consolidated Tax Account for distribution toindividual local governments within the county.

1999 The 1999 Legislature enacted Assembly Bill 667, which is Nevada's modellegislation for the Tobacco Master Settlement Agreement. Effective May 24,1999, all manufacturers of tobacco products sold in Nevada are required toparticipate in the Tobacco Settlement Agreement or to place money inescrow.

2001 Senate Bill 381, effective July 1, 2001, revised the definition of wholesaledealer and wholesale price for Other Tobacco Products. SB 381 changedthe payment of tax to after the sale or distribution of Other TobaccoProducts.

Senate Bill 527, effective July 1, 2001, provides for an exemption for duty-free sales enterprises and persons importing cigarettes for personal use. SB527 also requires cigarette revenue stamps designed to identify the dealerwho affixes the stamp.

48


AMENDMENTS (continued) 2003 Senate Bill 8, effective July 22, 2003, enacted a tax rate change oncigarettes to 40 mills per cigarette.

Assembly Bill 4, effective August 1, 2003, changed the cigarette wholesalers’discount rate for stamping from 3 percent to 0.5 percent. AB4 also changedthe other tobacco products wholesalers’ collection allowance from 2 percentto 0.5 percent if the taxes are paid timely.

2005 Assembly Bill 436, effective October 1, 2005, requires the Department tomaintain a listing of tobacco products that may be sold in the state ofNevada on the Department’s internet website by January 1, 2006; prohibits aperson from affixing a stamp to a package of cigarettes of a manufacturer oftobacco products or brand family which is not included in the directory; andprohibits the sale, offer or possession for sale, cigarettes of a manufacturerof tobacco products or brand family not included in the directory.

Assembly Bill 464, effective June 10, 2005, adds new licensing requirementsfor manufacturers and retailers of tobacco products; adds licensing andreporting requirements for anyone selling tobacco products into Nevada;prohibits a person, other than a wholesale dealer, from receiving unstampedcigarette packages; and provides various felony charges for certainviolations of the tobacco tax laws.

2008 Senate Bill 2 of the 25th Special Session temporarily changed the cigarettewholesalers' discount rate for stamping from 0.5 percent to 0.25 percent.Senate Bill 2 also temporarily changed the other tobacco productswholesalers' collection allowance from 0.5 percent to 0.25 percent for theperiod beginning on January 1, 2009 and ending on June 30, 2009.

2009 Assembly Bill 552 of the 2009 Legislative Session removed the sunset date of June 30, 2009 for the collection allowance and discount rate of 0.25 percent.

49



Carson City 219,061$ 0.22%Churchill 99,722 0.10%Clark 7,855,848 7.72%Douglas 189,719 0.19%Elko 204,560 0.20%Esmeralda 3,398 0.00%Eureka 7,946 0.01%Humboldt 68,688 0.07%Lander 24,581 0.02%Lincoln 20,151 0.02%Lyon 206,433 0.20%Mineral 18,488 0.02%Nye 175,009 0.17%Pershing 27,710 0.03%Storey 16,212 0.02%Washoe 1,689,964 1.66%White Pine 39,295 0.04%

TOTAL COUNTY TRANSFER 10,866,785$ 10.68%

Administrative Fees 518,572 0.51%State General Fund 78,715,764 77.38%Other Tobacco Products 11,620,286 11.42%TOTAL 101,721,406$ 100.00%

TRANSFER OF CIGARETTE TAX REVENUE


50

LIQUOR TAX REVENUE

FISCAL YEAR TAX LICENSES

AND FINES TOTAL

COLLECTIONS % CHANGE FROM

PRIOR YEAR2008-09 40,670,524$ 151,681$ 40,822,205$ -6.42%2009-10 42,396,078 175,813 42,571,891 4.29%2010-11 43,621,305 205,392 43,826,696 2.95%

2011-12 * 44,994,469 216,433 45,210,902 3.16%2012-13 44,106,113 227,207 44,333,320 -1.94%2013-14 46,491,620 209,060 46,700,681 5.34%

*Fiscal Year 2011-12 Tax and Licenses and Fines have been revised due to additional information received.

LEGAL CITATION Chapters 369 and 597 Nevada Revised Statutes.

RATES Over 22 percent alcohol content by volume $3.60 per gallonOver 14 percent up to 22 percent by volume $1.30 per gallon0.5 up to 14 percent by volume $0.75 per gallonBeer $0.16 per gallon

LICENSE FEES Importer of wine, beer, and liquor $500Importer of beer $150Wholesaler of wine, beer and liquor $250Wholesaler of beer $75Brew Pub $75Brewer $75Winemaker $75Certificate of Compliance $50

FINES First offense $500Second offense $1,000Third and subsequent offenses $2,000

CURRENT DISTRIBUTION OF REVENUE 50 cents per gallon of collections on over 22 percent alcohol contentallocated for distribution to eligible local governments through theConsolidated Tax distribution. The portion of tax on liquor containingover 22 percent alcohol which exceeds $3.45 per wine gallon istransferred to the liquor program account in the State General Fund.Fifty percent of Liquor Awareness Fines go to Aid for Victims ofDomestic Violence and the other fifty percent go to communityjuvenile justice programs. All remaining revenues go to the StateGeneral Fund.

$-

$10

$20

$30

$40

$50

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

51

Liquor Tax Revenue (continued)

ORIGINALLY ENACTED 1935 as a Stamp Tax.

RATES 1935

1945

1947

1961

1969 Over 22 percent alcohol increased to $1.90 per gallon.

1981 Over 22 percent alcohol increased to $2.05 per gallon.

1983

DISTRIBUTION 1935

1937

1939

1943 5 percent maximum for administration; balance to General Fund.

1949 All revenue to General Fund, administration costs appropriated.

1969

No cities - 100 percent to county.

One city - based on population ratio of county and city.

Two or more cities - to cities based on population.

Case beer, 24 bottles, 6 cents per case; 36 bottles, 9 cents per case;keg beer, 2 cents per gallon. Wines up to 14 percent alcohol content,2 1/2 cents per quart; 14 percent up to 22 percent alcohol content, 5cents per quart. All alcoholic beverages over 22 percent alcoholcontent, up to 4 ounces, 1 cent; up to 8 ounces, 2 cents; up to 16ounces, 5 cents; up to 32 ounces, 10 cents.

Beer, 3 cents per gallon; liquor, 8 percent up to 14 percent alcoholcontent, 15 cents per gallon; over 14 percent up to 22 percent alcoholcontent, 25 cents per gallon; over 22 percent alcohol content, 60cents per gallon.

Beer, 3 cents per gallon; liquor, up to 14 percent alcohol content, 15cents per gallon; over 14 percent to 22 percent alcohol content, 30cents per gallon; over 22 percent alcohol content, 80 cents per gallon.

Beer, 6 cents per gallon; liquor, up to 14 percent alcohol content, 30cents per gallon; over 14 percent up to 22 percent alcohol content, 50cents per gallon; over 22 percent alcohol content, $1.40 per gallon.

Beer, 9 cents per gallon; liquor, up to 14 percent alcohol content, 40cents per gallon; over 14 percent up to 22 percent alcohol content, 75cents per gallon; over 22 percent alcohol content, $2.05 per gallon.

3 percent for administration, $100,000 to School Fund; $24,000 toUniversity Contingent Fund; balance to State Emergency EmploymentBond Interest and Redemption Fund.

5 percent maximum for administration; balance as follows: 50 percent to School Fund; 15 percent to University Contingent Fund; 35 percentto State Emergency Employment Bond Interest and RedemptionFund.

5 percent maximum for administration; balance as follows: 50 percent to School Fund; 40 percent to University Contingent Fund; 10 percentto Consolidated Bond Interest and Redemption Fund.

All revenues to General Fund except 5/19 of that collected on liquorover 22 percent which is allocated accordingly:

52


DISTRIBUTION (continued)

1981

AMENDMENTS 1945 Changed from Stamp Tax to Excise Tax.

1955 Allowed 2 percent tax discount to importer.

1961 Allowed 3 percent tax discount to importer.

1969

1981

1983

1995

1997

1999

2001

2003

Raised rate for over 22 percent alcohol content from $1.40 to $1.90and allocated 50 cents of that rate to counties and cities.

Raised rate for over 22 percent alcohol content from $1.90 to $2.05allocating 50 cents of that rate to counties and cities and 15 cents tothe Account for Alcohol and Drug Abuse in the Department of HumanResources Gift Fund.

Raised rates for beer to 9 cents per gallon; liquor up to 14 percentalcohol content, 40 cents per gallon; over 14 percent up to 22 percentalcohol content, 75 cents per gallon. Over 22 percent alcohol contentremained at $2.05 per gallon.

Assembly Bill 12, effective June 15, 2001, authorized the transfer ofliquor (not including beer), between affiliated retailers that hold non-restricted gaming licenses.

Raised rates for beer to 16 cents per gallon; liquor up to 14 percentalcohol content, 75 cents per gallon; over 14 percent up to 22 percentalcohol content, $1.30 per gallon and over 22 percent alcohol contentto $3.60 per gallon.

Assembly Bill 437, effective July 1, 2003, changed the definition ofsupplier and authorized the transfer of liquor including beer, betweenaffiliated retailers that hold non-restricted gaming licenses.

Assembly Bill 4, effective August 1, 2003, changed the early paymentdiscount rate from 3 percent to 0.5 percent.

Senate Bill 373, effective October 1, 2003, changed the reportingrequirements for shipments of liquor into Nevada by a common orcontract carrier.

Additional 15 cent tax on over 22 percent alcohol allocated to theAccount for Alcohol and Drug Abuse in the Department of HumanResources Gift Fund.

Senate Bill 428, effective June 7, 1999 increased the amount of winea Nevada resident may import from one gallon per month to twelvecases per year for personal or household use. Other alcoholicbeverages remain at one gallon per month.

The 1997 Legislature created the Consolidated Tax Program.Beginning FY 98-99, the Department implemented the program thatcombines BCCRT, SCCRT, Cigarette Tax, Liquor Tax, Real PropertyTransfer Tax and Motor Vehicle Privilege Tax into one monthlydistribution. Total allocation by county is transferred to theConsolidated Tax Account for distribution to individual localgovernments within the county.

An applicant for a certificate of compliance must pay a $50 fee. Thisfee is renewable on or before July 1st of each year.

53



2005

2008

2009 Assembly Bill 432 of the 2009 Legislative Session provides that fines collected from establishments for alcohol awareness training violations are to be distributed 50% to Aid to Victims of Domestic Violence and 50% to community juvenile justice programs.

Assembly Bill 221, effective June 10, 2005, adds rectifiers to thedefinition of a supplier.

Senate Bill 233, effective June 10, 2005, creates licensingrequirements for Instructional Wine Making Facilities; limits theamount of wine produced per person to 60 gallons in a 12 monthperiod; wine produced on the premises can only be used forhousehold or personal use; and exempts Instructional Wine MakingFacilities from the liquor excise tax.

Senate Bill 457, effective June 17, 2005, revised provisions governingthe storage and transfer of liquor between certain retail liquor stores;authorizes a wholesale dealer, supplier, retailer or retail liquor dealerto bring a civil action for certain violations relating to intoxicatingliquor; requires sellers, servers and security personnel employed at anestablishment where alcoholic beverages are sold to complete alcoholawareness training; and requires the Department of Taxation toimpose administrative fines upon the owners or operators of certainestablishments for violations relating to alcohol awareness trainingcards.

Assembly Bill 552 removed the sunset date of June 30, 2009 for the discount rate.

Senate Bill 2 of the 25th Special Session temporarily reduced theearly payment discount rate from 0.5 percent to 0.25 percent for theperiod beginning on January 1, 2009 and ending on June 30, 2009.

54



Carson City 72,496$ 0.16%Churchill 33,002 0.07%Clark 2,599,797 5.57%Douglas 62,785 0.13%Elko 67,697 0.14%Esmeralda 1,125 0.00%Eureka 2,630 0.01%Humboldt 22,732 0.05%Lander 8,135 0.02%Lincoln 6,669 0.01%Lyon 68,316 0.15%Mineral 6,118 0.01%Nye 57,917 0.12%Pershing 9,170 0.02%Storey 5,365 0.01%Washoe 559,273 1.20%White Pine 13,004 0.03%

TOTAL COUNTY TRANSFER 3,596,230$ 7.70%

Liquor Program Account 1,255,205 2.69%State General Fund 41,838,536 89.59%Alcoholic Beverage Awareness Program Fine Victims of Domestic Violence 5,355 0.01% Community Juvenile Justice Program 5,355 0.01%TOTAL 46,700,681$ 100.00%

TRANSFER OF LIQUOR TAX REVENUE


55

ALCOHOLIC BEVERAGE GROWTH

BEER - GALLONS

FISCAL YEAR GALLONS

% CHANGE FROM PRIOR

YEAR FISCAL YEAR GALLONS

% CHANGE FROM PRIOR

YEAR2008-09 75,818,448 -2.07% 2011-12 71,066,573 -0.86%2009-10 72,748,860 -4.05% 2012-13 69,667,527 -1.97%2010-11 71,685,996 -1.46% 2013-14 71,710,388 2.93%

FISCAL YEAR GALLONS

% CHANGE FROM PRIOR


% CHANGE FROM PRIOR

YEAR2008-09 8,119,233 -8.10% 2011-12 9,301,086 4.41%2009-10 8,591,790 5.82% 2012-13 9,304,461 0.04%2010-11 8,908,047 3.68% 2013-14 9,877,949 6.16%

ALCOHOLIC BEVERAGES 0.50% TO 14% ALCOHOL CONTENT BY VOLUME - GALLONS

60

65

70

75

80

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

0.0

2.0

4.0

6.0

8.0

10.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

56

Alcohol Beverage Growth (continued)

5860

61

62

REAL PROPER 64

66

69

75

FISCAL YEAR GALLONS

% CHANGE FROM PRIOR


% CHANGE FROM PRIOR

YEAR2008-09 1,281,127 -8.34% 2011-12 1,579,879 -0.63%2009-10 1,429,308 11.57% 2012-13 1,563,835 -1.02%2010-11 1,589,900 11.24% 2013-14 1,583,207 1.24%

FISCAL YEAR GALLONS

% CHANGE FROM PRIOR


% CHANGE FROM PRIOR

YEAR2008-09 5,933,128 -8.32% 2011-12 6,985,790 5.01%2009-10 6,383,442 7.59% 2012-13 6,804,994 -2.59%2010-11 6,652,696 4.22% 2013-14 7,208,111 5.92%

ALCOHOLIC BEVERAGES OVER 14% UP TO 22% ALCOHOL CONTENT BY VOLUME - GALLONS

ALCOHOLIC BEVERAGES OVER 22% ALCOHOL CONTENT BY VOLUME - GALLONS

0.0

0.5

1.0

1.5

2.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

4.5

5.0

5.5

6.0

6.5

7.0

7.5

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

57

LODGING TAX

FISCAL YEAR TOURISMGENERAL

FUNDSCHOOL

SUPPORT FUNDTOTAL


PRIOR YEAR2008-09 18,163,308.64$ -$ -$ 18,163,308.64$ -4.79%2009-10 13,842,014 97,671,733 - 111,513,747 513.95%2010-11 15,636,505 112,567,350 - 128,203,856 14.97%2011-12 17,318,898 - 126,448,499 143,767,397 12.14%2012-13 17,645,471 - 128,724,715 146,370,186 1.81%2013-14 19,279,041 - 141,118,366 160,397,406 9.58%

LEGAL CITATION Chapter 244.3354 Nevada Revised Statutes.

IMPOSITION AND RATE


ORIGINALLY ENACTED 1983 session of State Legislature, effective May 9, 1983.

AMENDMENTS

HISTORY

Tax on revenues from rental of transient lodging is imposed at the rate of atleast 1 percent of the gross receipts. 3/8 of the first 1 percent of the grossreceipts from the rental of transient lodging is paid to the Department ofTaxation by the county fair and recreation boards or by the board of countycommissioners in each county imposing a room tax. The county retains 5/8 ofthe first 1 percent for local promotion of tourism.

In counties with populations greater than 300,000, an additional tax of up to 3percent on the rental of transient lodging is remitted to the Department ofTaxation for distribution to the State Supplemental School Support Fund.

Proceeds of the tax are deposited by the Department with the State Treasurerfor credit to the fund for the promotion of tourism and to the StateSupplemental School Support Fund.

Initiative Petition 1 (IP 1) of the 2009 Session of the State Legislature imposedan additional 3 percent tax in counties with populations greater than 300,000for remittance to the State General Fund. If the lodging tax rate on July 31,2008 was under 10 percent, an additional lodging tax rate of 3 percent will beimposed. If the lodging tax rate exceeded 10 percent on July 31, 2008, thetax imposed is at a rate equal to the difference between 13 percent and thesum of the rates of the existing taxes. Any increase in the rate of an existingtax after July 31, 2008 does not reduce the rate of the tax imposed under IP 1.As of July 1, 2011 the additional percentage imposed by IP 1 is deposited intothe State Supplement School Support Fund.

$0

$30

$60

$90

$120

$150

$180

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

58

ESTATE TAX

FISCAL YEARTOTAL

COLLECTIONS

% CHANGE FROM PRIOR

YEAR FISCAL YEARTOTAL

COLLECTIONS

% CHANGE FROM PRIOR

YEAR2008-09 466,994$ 105.27% 2011-12 29,239$ -75.00%2009-10 103,739 -77.79% 2012-13 49,573 69.55%2010-11 116,964 12.75% 2013-14 631,606 1174.08%

LEGAL CITATION Chapter 375A Nevada Revised Statutes.

ORIGINALLY ENACTED 1987 session of State Legislature, effective March 13, 1987.

IMPOSITION


1.

2.

3.

4.

Five percent of the tax receipts held for reserve, to refund anyoverpayments of the tax.

Fifty percent of the remaining proceeds of the tax to the University andCommunity College System Endowment Fund.

The credit allowable against the federal estate tax for the payment ofState death taxes is being phased out by the Internal Revenue Serviceand will no longer apply on deaths occurring after December 31, 2004.Nevada estate tax is based solely on this credit.

HISTORY

Fifty percent of the remaining proceeds of the tax to the Department ofEducation to the fund for class-size reduction.

A tax imposed on the transfer of the taxable estate of a decedent whohas property located in Nevada at the time of death in the amount of themaximum credit allowable against the federal estate tax for the paymentof State death taxes.

The money in the estate tax account may only be disbursed asauthorized by the Legislature. The legislatively approved distribution ofestate tax receipts is as follows:

Transfer of an amount to the Department to reimburse the cost toadminister the tax.

-

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

59

Estate Tax (continued)

Department of Taxation administrative costs -$ Reserve for refunds 631,606 Department of Education: Trust Fund for the Education of Pupils - University of Nevada System Endowment Fund -

TOTAL 631,606$

ESTATE TAX RESERVE FOR REFUNDS

Beginning balance brought forward July 1, 2013 149,292$ Estate tax receipts - Reserve for refunds Fiscal Year 2013 631,606

Balance available 780,898$

Less: Refunds issued Fiscal Year 2014 -

Ending Balance at June 30, 2014 780,898$

FISCAL YEAR 2013-14DISTRIBUTION OF ESTATE TAX REVENUE

60

TIRE TAX

FISCAL YEARTOTAL

COLLECTIONS% CHANGE FROM PRIOR

YEAR2008-09 1,631,512$ -8.17%2009-10 1,655,033 1.44%2010-11 1,747,248 5.57%2011-12 1,693,257 -3.09%2012-13 1,719,514 1.55%2013-14 1,768,460 2.85%

LEGAL CITATION Chapter 444A Nevada Revised Statutes.

IMPOSITION AND RATE

ORIGINALLY ENACTED 1991 Session of the State Legislature.

AMENDMENT

A tax imposed on the retail sale of a new tire at the rate of $1.00 per tire.The tax is collected from the purchaser by the seller at the time of sale inaddition to applicable sales taxes; 95 percent of the tax is remitted to theDepartment; 5 percent is retained by the seller to cover their relatedadministrative costs.

The revenue collected by the Department is deposited for credit to thesolid waste management account in the State General Fund. The StateController distributes quarterly as follows: 0.5 percent, Department ofTaxation; 44.5 percent State Department of Conservation and NaturalResources; 30 percent Clark County District Board of Health; and 25percent Washoe County District Board of Health.

1993 Session of the State Legislature, per Senate Bill1 97 and AssemblyBill 386; transferred the function of tax collection to the Department ofTaxation from the Department of Conservation and Natural Resourcesand provided for the change to the current distribution.

HISTORY


$1.20

$1.30

$1.40

$1.50

$1.60

$1.70

$1.80

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

61

GOVERNMENT SERVICES FEE

FISCAL YEAR TOTAL COLLECTIONS% CHANGE FROM PRIOR

YEAR2008-09 39,927,181$ -3.10%2009-10 45,258,487 13.35%2010-11 51,039,985 12.77%2011-12 52,509,571 2.88%2012-13 54,694,426 4.16%2013-14 55,251,487 1.02%

LEGAL CITATION Chapter 244A and Chapter 482 Nevada Revised Statutes.

IMPOSITION AND RATE

ORIGINALLY ENACTED

AMENDMENTS 1997

2001 Assembly Bill 460, effective January 1, 2002 changed Short Term LessorFee to Government Services Fee. The filing of returns was changed fromannual to quarterly reporting. The credit previously allowed for vehiclelicensing fees and tax was removed, and a Recovery Surcharge Fee ofup to 3.5% of lease amount was added to allow lessors to recover thecost of fees and taxes.

1993 Session of the State Legislature, effective July 9, 1993.

Assembly Bill 388, effective July 1, 1997 effectively transferred theresponsibility for the collection of the short-term lease fees from theDepartment of Motor Vehicles and Public Safety to the Department ofTaxation.

A fee imposed on the short-term lease of passenger vehicles. The fee is10 percent of lease charges. Fees are due on a quarterly basis.

HISTORY

State General Fund, State Highway Fund, Washoe County and Clark Coun

Effective April 1, 2004 Washoe County imposed a fee at the rate of 2percent of lease charges with 0.25 percent of that amount going to theDepartment of Taxation for Collection allowance.

Effective July 1, 2005 Clark County imposed a fee at the rate of 2 percentof lease charges with 0.10 percent of that amount going to theDepartment of Taxation for Collection allowance.


$-

$10

$20

$30

$40

$50

$60

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

62

Government Services Fee (continued)


2003

2007

2008 25th Special

Session

2009

2011

DISTRIBUTION OF GOVERNMENT SERVICES FEE

FISCAL HIGHWAY GENERAL WASHOE CLARK COLLECTION TOTALYEAR FUND FUND COUNTY COUNTY ALLOWANCE COLLECTIONS

2008-09 3,425,965$ 27,519,622$ 1,535,546$ 7,434,745$ 11,303$ 39,927,181$ 2009-10 3,890,026 33,579,292 1,147,437 6,632,218 9,515 45,258,487 2010-11 4,264,784 38,600,630 1,256,238 6,908,270 10,064 51,039,985 2011-12 17,424 44,499,016 1,152,133 6,831,272 9,726 52,509,571 2012-13 (17,742) 45,753,454 1,196,251 7,751,662 10,802 54,694,426 2013-14 721 46,151,227 1,141,625 7,947,098 10,816 55,251,487

Assembly Bill 561, effective July 1, 2011 eliminates the distribution to the State Highway Fund.

Senate Bill 234, effective October 1, 2009 changes the Governmental Services Fee from 6% to 10%, with one tenth of this amount or 1% being allocated to the State Highway Fund.

Senate Bill 2 was effective from January 1, 2009 through June 30, 2009. It required an additional one-quarter of the Short-Term Lessor Recovery Surcharge to be allocated to the General Fund.

Senate Bill 497 effective June 10, 2003, authorized the county commissioners of a county whose population is 100,000 or more, but less than 400,000 (Washoe County only) to impose a fee of up to 2% of the lease of certain passenger cars by a short-term lessor. The bill also increased the recovery surcharge from 3.5% to an amount not to exceed 4% of the total amount for which the passenger car was leased.

Assembly Bill 16, effective July 1, 2003, authorizes the county commissioners of a county whose population is 400,000 or more (Clark County only) to impose a fee of up to 2% on the lease of certain passenger cars by a short-term lessor.

Assembly Bill 595 effective October 1, 2007, requires one-quarter of the Short- Term Lessor Recovery Surcharge to be allocated to the Highway Construction Fund.

63

MEDICAL MARIJUANA TAX

FISCAL YEAR TOTAL COLLECTIONS% CHANGE FROM PRIOR

YEAR2013-14 -$ 0.00%

LEGAL CITATION Chapter 453A

IMPOSITION AND RATE

ORIGINALLY ENACTED

AMENDMENTS

2013 Session of State Legislature, effective April 1, 2014

An Excise tax is imposed on medical marijuana at the rate of 2% at the cultivation facility, and 2% at the production facility, and 2% at the Medical Marijuana Dispensary. The tax at the dispensary is in addition to the state and local sales and use taxes that are otherwise imposed on the sale of tangible personal property


75% to the State Distributive School Account in the State General Fund

HISTORY

25% to the Health Division of the Department of Health and Human Services

$-

$10

$20

$30

$40

$50

$60

Revenue collections anticipated to begin FY15

MILLIONS

FISCAL YEAR

64

The Locally Assessed Properties Section oversees and monitors the quality of assessmentsperformed by county assessors. Staff appraisers conduct appraisal ratio studies to determine theratio of the assessed value of property to the taxable value of the property in each county of the Stateevery third year (NRS 361.333). In addition to reporting on the assessment level and uniformity withineach county, the Locally Assessed Properties Section conducts performance audits and reviewsassessment policies, procedures and methods used within each county to ensure proper methodsand procedures are developed and maintained. The staff analyzes and publishes improvementfactors to be applied to non-reappraised properties, the level of exemption for personal property taxbills, and prepares special studies requested by the Nevada Tax Commission.

In addition, the real and personal property associated with mines is valued by the Centrally AssessedProperties Section pursuant to NRS 362.100(1)(b). Approximately 173 secured and unsecuredmining property valuations are then transmitted to county assessors for property tax assessment andcollection.

Local Government Finance Section

Locally Assessed Properties Section

The Centrally Assessed Properties Section also collects and distributes the Net Proceeds of MineralsTax and the property tax from interstate or inter-county properties to the counties.

Centrally Assessed Properties is also responsible for the administration of the Net Proceeds ofMinerals Tax under the authority granted in NRS 362.100. Every person extracting any mineral isrequired to file a statement showing the gross yield, royalties paid and claimed net proceeds fromeach geographically separate operation where a mineral is extracted. The Centrally AssessedProperties Section reviews the reported information and computes taxes due. There areapproximately 126 net proceeds operators currently reporting to Taxation.

The Local Government Finance Section provides oversight of the financial administration ofapproximately 265 Nevada local governments. Statutory authority for this function is found in NRSChapters 350 - Municipal Obligations, and 354 - Local Financial Administration. The localgovernment finance staff reviews and approves the budgets of all local governments within the stateand monitors budgetary and financial information throughout the fiscal year. In addition to theseduties, the section provides ad valorem (property) tax revenue rate regulation, provides oversight oflocal government debt management and evaluates financing proposals submitted by localgovernments.

When the Nevada Tax Commission (NTC) declares a local entity in severe financial difficulty, theLocal Government Finance Section also provides management oversight and, in extreme cases,provides financial administration. No local governments are currently designated as in severefinancial emergency.

LOCAL GOVERNMENT SERVICES DIVISION

Centrally Assessed Properties Section

The Local Government Services Division (LGS) is responsible for administering and overseeing variousproperty tax programs and providing oversight to the financial administration of local governments. LGSconsists of five (5) sections as follows, plus a Publications and Education Section not described:

Under the authority of NRS 361.320, the Centrally Assessed Properties Section is responsible for thevaluation, assessment, collection and distribution of ad valorem ("according to value") taxes related toproperty of an interstate or inter-county nature. Approximately 383 interstate or inter-countyproperties owned by airlines, railroads, telecommunications, electric power, gas pipeline, privatecarlines and water companies are valued by the Centrally Assessed Properties Section.

65

In addition, the Section designs, plans, and conducts performance audits of county officials withregard to the administration of the property tax, including a variety of topics such as the methodologyused to establish value for taxable property, the application of exemptions and abatements, and thecollection and distribution of the property tax.

Boards and CommissionsThe Appraiser Certification Board (ACB) is an appointed board established to advise theDepartment of Taxation on matters pertaining to certification and continuing education of allappraisers certified for tax purposes. The staff tracks and maintains a database of all CountyAppraisers' continuing education credits.

The Committee on Local Government Finance (CLGF) is an eleven member appointed boardauthorized by NRS 354 to advise the Department of Taxation on matters affecting local governmentsand their finances. The staff prepares and delivers reports on the financial condition of localgovernments, and drafts regulations on local government finance topics for adoption by CLGF.

The Nevada Tax Commission (NTC) The staff prepares a variety of publications regarding propertytax assessment which must be approved by the Commission. In addition, staff maintains case filesfrom appeals of abatement determinations by County Assessors and also prepares case files andmakes recommendations for appeals of decisions of penalty and interest waivers by CountyTreasurers and Assessors. Staff also drafts regulations clarifying statutes in NRS Chapters 360, 361,361A, 362 and 375.

The Mining Oversight and Accountability Commission (MOAC) The staff arranges meetings forthe Commission to review compliance issues of various state agencies with regard to the miningindustry and prepares reports regarding the net proceeds of minerals tax. The MOAC was created bySenate Bill 493 of the 2011 Session of the Nevada Legislature.

The State Board of Equalization (SBE) hears and determines all appeals from action of county

In addition, under the authority of NRS 375, the Audit Section provides oversight, compliance, andaudit services to the offices of county recorders. The Section monitors appeals of the real propertytransfer tax in local jurisdictions and reviews district attorney opinions for congruity and compliancewith NRS 375 and NAC 375. In addition, the section discovers, researches, and distributesinformation to the county recorders with regard to applying exemptions and requirements forsupporting documentation, and monitors all remittances submitted pursuant to NRS 375.023 and NRS 375.070, and reconciles the remittances to county recorder reports.

Pursuant to NRS 362.200, the Audit Section also conducts financial audits of taxpayers reporting netproceeds of minerals tax.

This section establishes, for assessment purposes, the valuation of: agricultural land (NRS 361a.140); mobile homes (NRS 361.325); and personal property (NRS 361.227). The Department providesguidance in the implementation of the property tax abatement program adopted by the Nevada StateLegislature in 2005.

In addition, this section assists county assessors in valuing property upon request or upon thedirection of the NTC (NRS 360.215 (8)). If the NTC finds property in a county to be assessed outsidethe guidelines of the ratio studies, it may call upon the section to implement a reappraisal program(NRS 361.333 (5c)). This section also provides training to Assessors through classes and webinars.

The Audit Section conducts audits of the records of county recorders and county treasurers to ensure the real property transfer tax is collected fairly and equitably with all claims for exemption in compliance with NRS 375.090. The audit consists of on-site inspections, individual interviews with the recorder and treasurer of the subject county, and review of deeds, declarations of value, other corporate, estate planning, and title documents, to determine whether the transfer of real property was a taxable event.

Audit Section

66

boards of equalization. The SBE also hears and determines direct appeals from valuations of theNevada Tax Commission. The staff prepares all hearing notices, case files and decision letters.

67

CERTIFICATION OF PROPERTY TAX APPRAISERS

NUMBER OF CERTIFIED APPRAISERS - JUNE 2014

REAL ANDREAL PERSONAL PERSONAL TEMPORARY

JURISDICTIONS PROPERTY PROPERTY PROPERTY CERTIFICATIONS

Department of Taxation 1 2 11 6Carson City 0 1 3 2Churchill 1 2 3 0Clark 1 0 43 6Douglas 1 0 5 0Elko 2 1 5 1Esmeralda 1 0 1 0Eureka 2 1 0 0Humboldt 4 1 0 0Lander 0 1 1 0Lincoln 0 0 3 0Lyon 3 0 4 0Mineral 0 1 1 0Nye 1 1 3 0Pershing 0 0 2 0Storey 0 0 2 0Washoe 3 1 23 0White Pine 3 0 1 0Independent Contractors 0 1 0 0

TOTAL 23 13 111 15

All persons who are employees of or independent contractors for the State or any of its politicalsubdivisions and who perform the duties of an appraiser for tax purposes must hold a valid appraisercertificate issued by the Department of Taxation.

The Department issues an appraiser certificate to any person who has successfully passed theappropriate certification exam. Persons holding a professional designation may be able to waive takingcertain portions of the exam.

Each person who holds an appraiser certificate must complete 36 contact hours of appropriate trainingin each succeeding fiscal year following certification. The 36 hour training requirement is waived forpersons who either have accumulated 180 contact hours or hold a professional designation. Thesepersons must complete 36 contact hours during every three year period thereafter.

Newly employed appraisers are issued a temporary certificate which expires two years following theemployee's date of hire or upon successful completion of the appraiser certification exam, whicheveroccurs first. The temporary certificate is not renewable.

68

No Changes

COUNTY TOTAL Taxpayer Petition Granted

Taxpayer Petition Denied

Assessor Petition Granted

Assessor Petition Denied

Equalization Order

Heard No Jurisdiction

Not Heard Withdrawn

Contin-uances

Decisions by State Board of Equalization

Net Increase Net Decrease

Carson City 2 1 1 - - - - - 38,258 Churchill - - - - - - - - - Clark 240 42 120 3 2 - 16 46 11 - 4,420,243 5,367,061 Douglas 1 - - - - 1 - - - Elko 3 1 1 - - - 1 - - - - 29,266 Esmeralda 1 - 1 - - - - - - Eureka - - - - - - - - - - - - Humboldt - - - - - - - - - - - - Lander - - - - - - - - - - - - Lincoln 1 - - - - - - - 1 - - - Lyon 5 - 2 2 1 - - - - Mineral - - - - - - - - - - - - Nye 1 - 1 - - - - - - Pershing - - - - - - - - - - - - Storey 7 4 2 - 1 - - - 145,061 Washoe 19 4 4 - - - 1 9 1 - - 1,522,984 White Pine 1 1 - - - - - - - - - 560 TOTALS 281 53 132 3 2 - 20 57 14 - 4,420,243 7,103,190

Centrally Assessed 3 1 - 1 - - 1 - - - 10,772,650 UnitaryCases continued 33 - - - - - - - 33 - - - from prior years

GRAND TOTAL 317 54 132 4 2 - 21 57 47 - 4,420,243 17,875,840

NET IMPACT of All Decisions (13,455,597)

* Note: The principal difference between Secured and Unsecured tax rolls is related to the levy of the tax.

Changes

Pursuant to NRS 361.450, every tax levied is a perpetual lien against the property assessed until the tax and any penalty charges and interest which may accrue are paid. The lien attaches on July 1 each year, upon all [real] property within the county.

SECURED 2013-14

STATE BOARD OF EQUALIZATION2013-14 SUMMARY OF TRANSACTIONS* - SECURED PROPERTY VALUATIONS

The State Board of Equalization hears and determines appeals from action of county boards of equalization. The State Board also hears and determines direct appeals fromvaluations of the Nevada Tax Commission, agricultural conversion, exemptions and other types of appeals. The Division of Assessment Standards is responsible for coordinatingmeetings of the State Board of Equalization.Other responsibilities of the State Board of Equalization include equalizing property valuations in the State, by reviewing the tax rolls of the various counties as equalized by thecounty boards of equalization. If necessary, the State Board adjusts the valuations thereon in order to equalize property tax values.

69

COUNTY TOTAL Heard No Jurisdiction

Not Heard Withdrawn Continuances

Taxpayer Petition Denied

Assessor Petition Denied

Taxpayer Petition Granted

Assessor Petition Granted

Equalization Order Net Increase Net Decrease

Carson City - - - - - - - - - Churchill - - - - - - - - - - Clark 10 1 9 - - - - - - - Douglas - - - - - - - - - - Elko - - - - - - - - - - Esmeralda - - - - - - - - - - Eureka - - - - - - - - - - Humboldt - - - - - - - - - - Lander - - - - - - - - - - Lincoln - - - - - - - - - - Lyon - - - - - - - - - - Mineral - - - - - - - - - - Nye - - - - - - - - - - Pershing - - - - - - - - - - Storey - - - - - - - - - - Washoe 28 2 10 4 5 - 7 - - 3,415,073 White Pine - - - - - - - - - - TOTALS 38 3 19 4 5 - 7 - - 3,415,073

Centrally Assessed - - - - - - - - - - - Unitary 1 - - - - - 1 - - - Dept - Mines 8 1 - - - - 7 - - 32,730,597 Net Proceeds of Mines 2 - - - - - - 2 195,669 - Cases continued from prior years 7 - - 7 - - - - - -

GRAND TOTAL 56 4 19 11 5 - 15 2 195,669 36,145,670

NET IMPACT of All Decisions (35,950,001)

* Note: The principal difference between Secured and Unsecured tax rolls is related to the levy of the tax.

STATE BOARD OF EQUALIZATION 2013-14 SUMMARY OF TRANSACTIONS* - UNSECURED PROPERTY VALUATIONS

No Changes Changes

Pursuant to NRS 361.450, every tax levied is a perpetual lien against the property assessed until the tax and any penalty charges and interest which may accrue are paid. The lien attaches on July 1 each year, upon all [real] property within the county.

70

ASSESSED VALUATIONS

FISCAL YEAR VALUATION

% CHANGE FROM PRIOR

YEAR FISCAL YEAR VALUATION

% CHANGE FROM PRIOR

YEAR2008-09 152,562,720,542$ 8.9% 2011-12 88,774,844,097$ -12.0%2009-10 125,545,791,522 -17.7% 2012-13* 85,763,087,988 -3.4% 2010-11 100,905,585,402 -19.6% 2013-14 86,663,394,847 1.0%

Assessed values shown are net of exemptions.*2012-13 numbers vary from last annual report due to corrections made after reporting time frame.RATIO STUDY

TOTAL NET ASSESSED VALUATION STATEWIDE

Under NRS 361.333, the Nevada Tax Commission is obligated to equalize property under its jurisdiction.Equalization is the process by which the Commission ensures "that all property subject to taxation within thecounty has been assessed as required by law." There are two types of information which the Commissionconsiders to determine whether property has been assessed equitably. The first type of information comes froma ratio study, which is a statistical analysis designed to study the level and uniformity of the assessments. Thesecond type of information comes from a performance audit which is designed to fulfill the requirements of NRS361.333(1)(b)(2). The performance audit examines the work practices of the assessor to determine whether allproperty is being assessed in a correct and timely manner.

In addition, the State Board of Equalization is required to equalize property valuations in the state pursuant toNRS 361.395. The State Board also uses the information on county tax rolls and the Department's ratio study todetermine if inter-county equalization is necessary (see page 63 for information regarding the amount of valuationincreases or decreases as a result of equalization orders).

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

BIL

LIO

NS

$-

$30

$60

$90

$120

$150

$180

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

BILLIONS

FISCAL YEAR

71

ASSESSED VALUATION BY PROPERTY CLASSES BEFORE EXEMPTIONS

2012-13 VALUATION*

PERCENT OF TOTAL VALUATION

2013-14 VALUATION

PERCENT OF TOTAL

VALUATION* RURAL LANDS $123,331,039 0.125% $128,922,551 0.129%RURAL LANDS - IMPROVEMENTS 162,070,024 0.164% 169,724,869 0.170%FARM EQUIPMENT & MACHINERY 36,516,663 0.037% 35,799,188 0.036%URBAN PROPERTY - LAND 28,037,508,541 28.432% 28,018,958,401 28.023%URBAN PROPERTY-IMPROVEMENTS 57,098,921,706 57.902% 58,783,356,710 58.791%OTHER PERSONAL PROPERTY 595,383,436 0.604% 478,201,457 0.478%PUBLIC UTILITIES 4,488,522,856 4.552% 5,327,495,107 5.332%AIRPLANES 326,575,092 0.331% 405,691,374 0.406%BILLBOARDS 42,591,167 0.043% 113,522,945 0.114%OPEN SPACE 104,811,007 0.106% 208,483,609 0.209%MILL & MINE IMPROVEMENTS 1,370,171,488 1.389% 1,452,597,417 1.453%MINING EQUIPMENT & MACHINERY 884,185,909 0.897% 1,199,573,803 1.200%MOBILE HOMES 190,756,228 0.193% 282,405,820 0.283%NET PROCEEDS OF MINES 5,038,580,874 5.110% 3,250,579,483 3.251%PATENTED MINE CLAIMS 109,263,358 0.111% 125,086,142 0.125%OIL & GAS LEASES 3,724,644 0.004% 3,654,845 0.003%TOTAL 98,612,914,032$ 100.000% 99,983,668,870$ 100.000%*Based upon agricultural use assessment according to NRS 361A.

ASSESSED VALUATION BY COUNTIES AFTER EXEMPTIONS

FISCAL YEAR FISCAL YEAR PERCENTCOUNTY 2012-13* 2013-14 CHANGE CHANGECARSON CITY $1,383,781,859 $1,333,036,906 (50,744,953)$ -3.67%CHURCHILL 675,995,501 673,315,322 (2,680,179) -0.40%CLARK 56,036,275,214 57,617,944,093 1,581,668,879 2.82%DOUGLAS 2,769,609,619 2,630,273,389 (139,336,230) -5.03%ELKO 1,586,948,699 1,917,078,334 330,129,635 20.80%ESMERALDA 82,378,518 94,791,359 12,412,841 15.07%EUREKA 2,454,237,064 1,697,408,414 (756,828,650) -30.84%HUMBOLDT 1,392,587,221 1,497,185,743 104,598,522 7.51%LANDER 2,365,242,147 2,070,883,172 (294,358,975) -12.45%LINCOLN 227,756,706 254,506,423 26,749,717 11.74%LYON 1,219,203,006 1,258,971,305 39,768,299 3.26%MINERAL 144,034,509 191,499,713 47,465,204 32.95%NYE 1,618,050,706 1,553,501,080 (64,549,626) -3.99%PERSHING 362,414,927 284,819,840 (77,595,087) -21.41%STOREY 430,602,831 505,434,629 74,831,798 17.38%WASHOE 12,402,951,989 12,638,345,446 235,393,457 1.90%WHITE PINE 611,017,472 444,399,680 (166,617,792) -27.27%TOTAL 85,763,087,988$ 86,663,394,847$ 900,306,860$ 1.05%

The above totals may not reflect final State Board of Equalization changes for either fiscal year.*2012-13 numbers vary from last annual report due to corrections made after reporting time frame.

72

REAL PROPERTY TRANSFER TAX

LEGAL CITATION

IMPOSITION AND RATE


ORIGINALLY ENACTED

REVISED TO INCLUDE STATE GENERAL FUND

2003 Special Session of State Legislature, effective October 1, 2003.

Chapter 375.023 - 375.026 Nevada Revised Statutes.

$1.95 on each $500 of value, or fraction thereof, on transfer of real property, except in Churchill and Washoe counties which impose $2.05 and Clark county which imposes $2.55 on each $500 of value, or fraction thereof.

$1.30 to the State General Fund, $0.55 to Consolidated Tax, and $0.10 to the Account for Low Income Housing. In addition to this, Churchill and Washoe counties distribute an additional $0.10 for the Local Government Tax Act and Clark county distributes an additional $.60 for the School District.

HISTORY

Added to NRS in 1967.

Carson City 1.12%

Churchill 0.28%

Clark 76.13%

Douglas 2.76%

Elko 1.08%

Esmeralda 0.08%

Eureka 0.04%

Humboldt 0.36%

Lander 0.09%

Lincoln 0.05%

Lyon 1.50%

Mineral 0.03%

Nye 0.68%

Pershing 0.07%

Storey 0.41%

Washoe 15.39%

White Pine 0.12%

Percentage Collection of Transfer Tax by County FY 14, General Fund Only

73

Real Property Transfer Tax (continued)

Fiscal Year Collections2008-09 65,922,452$ -23.24%2009-10 53,315,435 -19.12%2010-11 51,552,368 -3.31%2011-12 48,373,678 -6.17%2012-13 54,989,831 13.68%2013-14 60,046,652 9.20%

Note: Collections reflected

July - Sept 13 Oct - Dec 13 Jan - Mar 14 April - June 141st Quarter 2nd Quarter 3rd Quarter 4th Quarter

General Fund General Fund General Fund General Fund

Carson City 155,245.66$ 179,419.39$ 179,779.74$ 160,029.44$ Churchill 31,514.77$ 42,700.09$ 37,409.23$ 54,361.59$ Clark 11,668,672.06$ 11,792,971.11$ 10,286,760.01$ 11,963,323.29$ Douglas 539,150.10$ 403,109.18$ 239,080.83$ 473,945.35$ Elko 188,289.39$ 190,581.54$ 110,185.23$ 159,963.81$ Esmeralda 1,437.58$ 19,486.46$ 1,639.64$ 25,021.85$ Eureka 2,783.78$ 7,452.92$ 3,057.33$ 8,077.22$ Humboldt 63,547.00$ 60,114.46$ 33,389.95$ 61,570.12$ Lander 20,102.94$ 10,604.92$ 12,095.22$ 9,380.94$ Lincoln 7,285.70$ 8,024.43$ 5,326.88$ 7,148.00$ Lyon 269,820.80$ 208,837.62$ 159,571.26$ 263,497.77$ Mineral 5,503.21$ 3,079.79$ 3,365.50$ 5,792.79$ Nye 115,141.31$ 82,962.26$ 102,966.30$ 108,273.49$ Pershing 15,319.16$ 4,916.34$ 9,508.36$ 10,652.50$ Storey 67,024.38$ 23,629.32$ 23,933.05$ 22,281.82$ Washoe 2,432,047.07$ 2,475,223.67$ 2,093,865.69$ 2,241,700.92$ White Pine 10,715.56$ 15,974.04$ 17,691.10$ 29,317.87$ TOTAL FOR QUARTER 15,593,600$ 15,529,088$ 13,319,625$ 15,604,339$

CUMULATIVE BY QUARTER 15,593,600$ 31,122,688$ 44,442,313$ 60,046,652$

% Change from Prior Year

General Fund Collected for Each QuarterFISCAL YEAR 2012

$-

$30

$60

$90

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

MILLIONS

FISCAL YEAR

Revenue Generated by Real Property Transfer Tax

74

NET PROCEEDS OF MINERALS

Percent of Percent of Percent of Percent of Total Gross Total Gross Total Gross Total GrossProceeds Proceeds Proceeds Proceeds

Mineral Type 2010-2011 2011-2012 2012-2013 2013-2014

Gold/Silver 88.11% 91.69% 91.38% 89.90%Copper 6.48% 4.35% 4.73% 4.90%

Geothermal 1.93% 1.60% 1.56% 2.04%Oil 0.35% 0.30% 0.16% 0.35%

Gypsum 0.16% 0.13% 0.30% 0.28%Other 2.97% 1.93% 1.87% 2.53%

100.00% 100.00% 100.00% 100.00%

The Nevada Department of Taxation determines the tax on the net proceeds of minerals pursuant to NRS Chapter362. Producers annually report the gross yield of each separate extractive operation as well as expenses relatedto the extraction, processing, transportation, and marketing of the mineral. Royalty recipients report only theamount of royalties received. The Department calculates the net proceeds by deducting allowable expenses fromthe gross yield.

The tax rate on the net proceeds of each operation depends on the ratio of the net proceeds to the gross proceeds as provided in NRS 362.140. The maximum tax rate is five percent, applied to net proceeds in excess of $4,000,000 annually and to all royalties. Taxpayers are required to estimate current year taxes and pre-pay based on those estimates. The Department certifies and bills the net proceeds tax due each year on April 20th, with final payment due by May 10th.

Percent of Total Gross Proceeds by Mineral Type

Other includes: Building Stone, Clay, Copper, Dolomite, Feldspar, Gemstones, Salt, and other miscellaneous minerals.

Gold/Silver 89.90%

Copper 4.90%

Geothermal 2.04%

Oil 0.35%

Gypsum 0.28%

Other 2.53%

Percent of Gross Proceeds 2013-2014

75

FISCAL YEAR

ACTUAL ASSESSED

VALUATION*

% CHANGE FROM PRIOR

YEAR FISCAL YEAR

ACTUAL ASSESSED

VALUATION*

% CHANGE FROM PRIOR

YEAR 2008-09 1,833,998,864$ 19.75% 2011-12 4,648,750,869$ 41.93%2009-10 1,970,113,768 7.42% 2012-13 5,126,731,918 10.28%2010-11 3,275,436,745 66.26% 2013-14 3,431,989,291 -33.06%

* Based on actual calendar year reports to the Department.

COUNTY 2009-10 2010-11 2011-12 2012-13 2013-14

Carson City -$ -$ -$ -$ -$ Churchill 23,267,635 24,516,795 25,803,889 18,956,522 18,440,054 Clark 2,418,622 1,335,968 3,466,066 3,270,918 6,117,336 Douglas 171,090 14,674 5,110 10,524 5,600 Elko 176,633,225 281,040,688 354,600,652 210,332,896 160,338,052 Esmeralda 3,494,904 7,015,362 1,653,297 21,627,690 28,129,417 Eureka 874,988,162 1,073,760,797 1,427,152,981 1,773,550,579 884,790,192 Humboldt 256,085,689 312,887,705 498,889,143 601,452,083 475,362,596 Lander 214,492,689 1,078,703,432 1,910,412,698 1,848,451,694 1,486,623,934 Lincoln 117,531 65,331 162,949 227,691 253,721 Lyon 92,101 503,721 1,058,629 1,757,889 4,003,748 Mineral 10,825,648 19,172,111 24,652,787 26,803,053 74,676,703 Nye 187,251,591 209,039,727 281,861,442 319,397,939 164,686,457 Pershing 29,600,953 62,545,156 30,043,508 70,194,783 58,693,817 Storey 287,319 354,160 629,423 927,736 1,417,403 Washoe 8,523,225 2,452,716 11,474,884 1,625,729 4,742,762 White Pine 181,863,384 202,028,402 76,883,410 228,144,192 63,707,500

TOTAL 1,970,113,768$ 3,275,436,745$ 4,648,750,868$ 5,126,731,917$ 3,431,989,292$ **

ACTUAL NET PROCEEDS OF MINERALS ASSESSED VALUATIONS

**Adjustments for County and State Board of Equalization pending decisions, and pending or unresolved audits are not reflected.

$500

$1,500

$2,500

$3,500

$4,500

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

FISCAL YEAR

76

FISCAL YEAR TAX

REVENUE

% CHANGE FROM PRIOR

YEAR FISCAL YEAR TAX

REVENUE

% CHANGE FROM PRIOR

YEAR 2008-09 145,449,950$ 96.21% 2011-12 253,311,919$ 4.41%2009-10 168,695,319 15.98% 2012-13 236,267,004 -6.73%2010-11 242,605,014 43.81% 2013-14* 62,120,899 -73.71%

Prior Year 2013-14 2014-15 TOTALCOUNTY Billings Billings Projections DISTRIBUTIONCarson City -$ -$ -$ -$ Churchill 12,985 (700) 487,120 499,405 Clark - 105,913 141,402 247,315 Douglas - Elko 196,907 965,342 2,256,801 3,419,050 Esmeralda - 574,552 196,022 770,574 Eureka 2,348 (4,537,626) 8,286,485 3,751,207 Humboldt - (3,571,876) 5,897,830 2,325,954 Lander 310 (1,056,933) 18,138,417 17,081,794 Lincoln - 2,183 8,944 11,127 Lyon - 93,915 52,084 145,999 Mineral - (215,430) 215,430 - Nye 52,505 (617,884) 2,723,806 2,158,428 Pershing 65,201 355,899 1,065,806 1,486,906 Storey 189,426 (17,241) 51,618 223,804 Washoe 13,974 25,158 122,946.66 162,079 White Pine - 114,300 1,355,031 1,469,330 TOTAL COUNTY DISTRIBUTION 533,657$ (7,780,426)$ 40,999,742$ 33,752,973$

State Debt Service Fund 32,088 (732,285) 2,846,153 2,145,957 State General Fund 363,345 (13,081,286) 38,939,910 26,221,970 State General Fund (Penalties & Interest) - - - - Postage - - - - TOTAL 929,090$ (21,593,997)$ 82,785,806$ 62,120,899$

NET PROCEEDS OF MINERALS TAX REVENUE COLLECTION AND DISTRIBUTION

* Distribution of $62,120,899.02 in projected Net Proceeds for Fiscal Year 2013-14 as a result of SB 2 is detailed below.

NET PROCEEDS OF MINERALS TAX DISTRIBUTIONFISCAL YEAR 2013-2014

$-

$50

$100

$150

$200

$250

$300

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

FISCAL YEAR

77

FISCAL YEAR

ASSESSED VALUATION

% CHANGE FROM PRIOR YEAR FISCAL YEAR

ASSESSED VALUATION

% CHANGE FROM PRIOR YEAR

2008-09 1,196,060,430$ 10.44% 2011-12 1,528,393,060$ 11.34%2009-10 1,266,017,380 5.85% 2012-13 1,935,884,041 26.66%2010-11 1,372,671,888 8.42% 2013-14 2,476,438,589 27.92%

NUMBER OF ASSESSED NUMBER OF ASSESSEDCOUNTY APPRAISALS VALUATION APPRAISALS VALUATION*Carson City 0 -$ 0 -$ Churchill 13 154,633,361 12 149,396,302 Clark 8 12,320,481 6 12,411,199 Douglas 0 - 0 - Elko 26 167,120,565 24 215,566,806 Esmeralda 9 11,871,083 9 14,677,214 Eureka 22 496,713,048 15 695,504,062 Humboldt 25 318,995,159 22 453,464,712 Lander 23 401,503,319 21 534,418,925 Lincoln 5 358,222 4 576,417 Lyon 10 14,662,269 7 15,841,722 Mineral 3 11,708,888 4 13,864,424 Nye 29 98,708,289 27 115,984,018 Pershing 12 62,835,514 10 68,750,628 Storey 2 8,503,797 2 9,891,326 Washoe 6 52,232,842 6 41,311,592 White Pine 7 123,717,206 4 134,779,242 TOTAL 200 1,935,884,041$ 173 2,476,438,589$

*May include adjustments for County and State Boards of Equalization through 2013.

MINING PROPERTIES - ASSESSED VALUATIONS

The secured, unsecured, and supplemental assessments form the values for the fiscal years above.

The Department of Taxation is required to appraise all mining improvements and personal property in accordance with NRS362.100(1b). The appraisals shown here are transmitted to the County Assessors who then apply adjustments, abatements,tax caps or land values.

FISCAL YEAR 2012-13 FISCAL YEAR 2013-14

$(200)

$300

$800

$1,300

$1,800

$2,300

$2,800

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

FISCAL YEAR

78

ASSESSMENT YEAR VALUATION% CHANGE FROM

PRIOR YEARASSESSMENT

YEAR VALUATION

% CHANGE FROM PRIOR

YEAR2008-09 3,184,699,325$ 18.93% 2011-12 3,856,099,094$ 9.00%2009-10 3,153,422,376 -0.98% 2012-13 3,828,961,280 -0.70%2010-11 3,537,581,638 12.18% 2013-14 4,592,189,915 19.93%

COUNTYSECURED

UTILITIES & 6-Mo CWIP

PRIVATE CARLINES

UNSECURED 12-Mo CWIP and PET TOTAL TAX

Carson City 822,094$ -$ 32,969$ $ 855,063 Churchill 1,437,168 6,110 91,140 $ 1,534,418 Clark 39,186,402 13,359 1,381,242 $ 40,581,003 Douglas 987,604 - 25,173 $ 1,012,777 Elko 9,399,402 26,587 98,421 $ 9,524,410 Esmeralda 499,189 - 67,035 $ 566,224 Eureka 441,478 3,330 14,466 $ 459,275 Humboldt 6,891,055 12,372 65,814 $ 6,969,242 Lander 1,297,518 5,428 47,391 $ 1,350,337 Lincoln 1,818,495 10,257 162,127 $ 1,990,879 Lyon 2,170,022 4,522 433,174 $ 2,607,718 Mineral 691,821 - 24,175 $ 715,996 Nye 1,786,018 - 648,195 $ 2,434,213 Pershing 1,605,463 10,362 99,324 $ 1,715,148 Storey 3,219,146 1,206 76,500 $ 3,296,852 Washoe 10,672,297 14,352 242,934 $ 10,929,583 White Pine 675,717 - 132,314 $ 808,030 Total County Distribution 83,600,888$ 107,884$ 3,642,395$ 87,351,167$

State Debt Service Fund 5,266,618 7,120 211,660 5,485,398 State General Fund - P&I - - - - Postage - - - - NV Dept of Energy Fund 185,439 - 629,342 814,781 TOTAL 89,052,945$ 115,004$ 4,483,397$ 93,651,347$

TAX DISTRIBUTIONFISCAL YEAR 2013-14

2013 - 2014 TAX YEARINTERSTATE AND INTERCOUNTY VALUATIONS

(ASSESSED VALUE)

CENTRALLY ASSESSED UNITARY AND CONSTRUCTION WORK IN PROGRESS

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Millions

FISCAL YEAR

79

TotalUnitary 6 Mo. CWIP Unitary 6 Mo. CWIP Unitary 6 Mo. CWIP Unitary 6 Mo. CWIP Unitary 6 Mo. CWIP By County

Carson City 357,176$ 299$ 18,406,307$ 331,499$ 19,638,765$ 797,637$ -$ -$ 664,178$ -$ 40,195,861$ Churchill 3,134,469 794 36,947,749 1,241,321 14,729,899 68,090 9,972,825 7,446 1,288,781 107,770 67,499,144 Clark 180,043,463 1,073,015 1,780,820,688 21,019,605 328,038,554 2,599,666 23,245,010 17,620 23,994,222 579,642 2,361,431,485 Douglas 230,731 3 36,332,906 643,534 5,703,810 45,053 - 10,366,977 - 53,323,014 Elko 3,054,049 4,387 60,689,142 977,729 272,042,824 438,208 45,318,891 33,524 22,927,774 1,177,363 406,663,891 Esmeralda 12,239,660 2,308 13,555,533 451,629 - - - 165,550 - 26,414,680 Eureka 1,569,783 650 20,376,482 761,511 1,313,796 181 8,755,606 6,457 1,268,359 86,689 34,139,514 Humboldt 2,679,006 8,933 76,985,616 919,691 231,580,836 346,572 24,639,084 18,206 5,338,836 263,693 342,780,473 Lander 3,255,010 7,334 35,288,845 650,875 1,844,929 2,726 7,164,469 5,292 1,037,624 71,344 49,328,448 Lincoln 4,220,002 12,065 44,648,269 10,955,985 18,168,573 57,686 17,033,734 12,911 5,308,716 352,486 100,770,427 Lyon 3,694,963 1,359 88,957,830 6,141,182 17,591,990 96,451 6,869,353 5,177 2,612,035 28,100 125,998,440 Mineral 7,333,566 3,510 20,386,832 449,090 691,723 3,010 - 21,549 - 28,889,280 Nye 22,468,468 22,151 62,525,821 7,149,788 702,221 402 - 1,165,887 1,734 94,036,472 Pershing 1,535,916 5,725 37,417,825 724,266 12,589,430 4,610 14,846,128 10,966 2,610,719 196,373 69,941,958 Storey 1,012,571 82 110,171,023 174,696 4,515,044 74,371 1,544,271 1,141 271,141 25,992 117,790,332 Washoe 41,517,361 14,946 159,231,901 3,150,323 172,917,609 3,504,036 21,135,629 15,761 10,217,730 148,612 411,853,908 White Pine 3,341,208 3,640 36,676,231 8,109,576 - - - - 8,923 10,602 48,150,180 Total 291,687,402$ 1,161,201$ 2,639,419,000$ 63,852,300$ 1,102,070,003$ 8,038,699$ 180,525,000$ 134,501$ 89,269,001$ 3,050,400$ 4,379,207,507$

2013- 2014 Tax YearSecured Tax Roll Summary

Assessed Values - Centrally Assessed Properties

Airlines Electrics Gas/Pipelines Railroads Communications

80

Unsecured Private Property Escaping TotalAirlines Carlines Taxation Airlines Electrics Gas/Pipeline Railroad Communication 12 Mo CWIP

Carson City 33,086$ -$ -$ 1,515$ 446,650$ 564,905$ -$ -$ 1,013,070$ Churchill 224,866 229,844 - 21,123 1,841,477 357,883 60,511 182,991 2,463,985 Clark 13,606,231 512,687 - 1,781,903 34,743,408 5,460,837 143,184 1,078,926 43,208,258 Douglas 527 - 96 863,289 164,069 - - 1,027,454 Elko 1,332,281 1,071,791 8,482 152,853 1,376,420 2,845,295 272,427 896,226 5,543,221 Esmeralda - - - 53,845 2,241,534 - - - 2,295,379 Eureka 117,099 208,823 731 31,184 1,206,807 37,791 52,469 147,223 1,475,474 Humboldt 282 584,496 - 414,875 1,414,693 510,119 147,947 849,550 3,337,184 Lander 212,256 170,154 - 340,222 879,698 53,069 43,001 133,421 1,449,411 Lincoln 152 375,751 - 563,071 17,460,099 16,023 104,924 575,424 18,719,541 Lyon 69,052 154,164 - 34,586 9,984,629 474,776 42,068 47,705 10,583,764 Mineral 1,717 - - 85,770 662,360 19,897 - - 768,027 Nye 1,910,990 - - 934,765 24,827,531 20,199 - 2,433 25,784,928 Pershing 222,477 352,489 - 266,913 921,365 362,132 89,116 333,242 1,972,768 Storey 533 36,622 - 4,866 235,235 91,784 9,274 44,548 385,707 Washoe 476,432 488,872 - 119,747 53,747,367 3,034,919 128,078 259,617 57,289,728 White Pine 13,420 - - 155,768 13,090,440 - - 1,994 13,248,202 Total $18,221,401 $4,185,693 $9,213 $4,963,102 $165,943,002 $14,013,698 $1,092,999 $4,553,300 $190,566,101

Pursuant to NRS 361.321, construction work-in-progress (CWIP) must be included on the central assessment roll.

*CWIP = Construction Work in Progress

2013-2014 TAX YEARUNSECURED TAX ROLL SUMMARY

ASSESSED VALUES CENTRALLY ASSESSED PROPERTIES

Twelve Month CWIP*

81

Secured Secured Unsecured Unsecured Unsecured Unsecured Combined Secured Unsecured CombinedUnitary 6 Mo. CWIP * Airline Carline PET ** 12 Mo. CWIP* Number of Total Value Total Value Total Value

Assessments Assessments Assessments Assessments Assessments Assessments Assessments Assessments Assessments AssessmentsCarson City 5 5 2 0 0 5 17 40,195,861$ 1,046,156$ 41,242,017$ Churchill 27 14 3 244 0 12 300 67,499,144 2,918,695 70,417,839 Clark 63 25 11 233 0 20 352 2,361,431,485 57,327,176 2,418,758,661 Douglas 8 4 1 0 0 4 17 53,323,014 1,027,981 54,350,995 Elko 27 17 1 244 1 13 303 406,663,891 7,955,775 414,619,666 Esmeralda 9 4 0 0 0 7 20 26,414,680 2,295,379 28,710,059 Eureka 17 11 1 244 1 9 283 34,139,514 1,802,127 35,941,641 Humboldt 21 13 1 244 0 11 290 342,780,473 3,921,962 346,702,435 Lander 21 11 2 244 0 8 286 49,328,448 1,831,821 51,160,269 Lincoln 23 13 1 233 0 9 279 100,770,427 19,095,444 119,865,871 Lyon 26 14 3 244 0 12 299 125,998,440 10,806,980 136,805,420 Mineral 15 8 1 0 0 9 33 28,889,280 769,744 29,659,024 Nye 23 11 3 0 0 13 50 94,036,472 27,695,918 121,732,390 Pershing 20 10 3 244 0 8 285 69,941,958 2,547,734 72,489,692 Storey 21 11 1 244 0 9 286 117,790,332 422,862 118,213,194 Washoe 43 20 6 244 0 14 327 411,853,908 58,255,032 470,108,940 White Pine 14 6 1 0 0 6 27 48,150,180 13,261,622 61,411,802 Total 383 197 41 2,662 2 169 3,454 4,379,207,507 212,982,408 4,592,189,915

* Construction Work in Progress** Property Escaping Taxation

2013-2014 TAX YEARCENTRALLY ASSESSED UTILITIES TAX ROLL SUMMARY

82

LOCAL GOVERNMENT FINANCE SECTION

Taxes

Fees for Licenses and Permits

INDEBTEDNESS

Medium Term Obligations

Annual Indebtedness Report

BUDGETS

1. Review in detail the form, classification and content of the local governments'estimated resources and expenditures/expenses;

2. Review and verify reported actual prior year resources and expenditures/expenseswith the amounts contained in the local governments' audited financial statements.

The examination and approval process applies to tentative, final, amended and augmented budgets.

Prepare and provide local governments with a written certificate of compliance or a written notice of lack of compliance regarding their submitted budget documents.

Examine, review, and approve local government budgets based on compliance ornoncompliance with statutes and regulations. The examination procedures include but are notlimited to the following:

The purpose of the Local Government Finance section is to oversee the financial administration of Nevada'scounties, cities, schools and special districts. For the Fiscal Year ended June 30, 2014, this consisted ofoverseeing the financial activities of 17 counties, 19 incorporated cities, 47 unincorporated towns, 17 schooldistricts, 176 special districts including 4 multi-county districts.

The major areas of responsibility of the section are contained within the provisions of the Local GovernmentBudget & Finance Act (NRS 354.470 to 354.626, inclusive). The areas include overseeing the revenuelimitations, indebtedness, budgets and audits of local governments. The section’s functional responsibilitieswithin each area include the following:

Establish and monitor the maximum allowed revenue a local government may receive fromproperty taxes.Compile, calculate and prepare proforma projections of revenue a local government mayreceive from property taxes.Calculate and prepare property tax rates to be certified by the Nevada Tax Commission.

REVENUE LIMITATIONS

Prepare and publish the Property Tax Rates Publication for Nevada Local Governments.

Compile, prepare and publish the Annual Local Government Indebtedness Report.

Prescribe guidelines for calculating fee increases for business licenses and building permits.

Monitor for compliance the adoption or increase of fees for business licenses and buildingpermits.

Review and approve or disapprove medium term financing requests including lease/purchaseobligations. The approval or disapproval is based upon the probable ability of the localgovernment to repay the debt.

Analyze, for reasonableness, the annual indebtedness information submitted by the localgovernments.

83

Local Government Finance Section (con't)

AUDITS

COUNTY SCHOOLS CITIES TOWNS DISTRICTS TOTAL

Carson City 124,638,886$ 87,838,393$ -$ -$ 5,215,767$ 217,693,046$ Churchill 45,971,645 49,644,076 26,335,629 - 1,546,052 123,497,402 Clark 6,124,026,199 3,716,145,000 2,102,333,835 13,845,160 1,585,614,521 13,541,964,715 Douglas 80,844,505 77,577,449 - 7,098,902 65,594,665 231,115,521 Elko 71,567,641 133,189,072 71,285,647 4,247,291 7,929,546 288,219,197 Esmeralda 7,983,005 2,191,634 - 800,118 - 10,974,757 Eureka 26,689,040 15,285,471 - 1,243,300 528,600 43,746,411 Humboldt 34,791,981 38,143,143 15,246,423 - 60,039,257 148,220,804 Lander 85,910,218 26,025,882 - 2,798,940 14,884,541 129,619,581 Lincoln 16,921,517 15,518,835 3,467,294 1,539,103 10,664,754 48,111,503 Lyon 56,308,662 79,796,937 25,447,068 - 17,970,849 179,523,516 Mineral 10,253,907 8,078,429 - 2,252,510 15,226,524 35,811,370 Nye 89,471,766 73,685,609 - 23,964,527 3,716,165 190,838,067 Pershing 13,921,923 12,460,542 2,201,566 77,028 10,424,637 39,085,696 Storey 21,536,915 8,345,571 - - 2,496,929 32,379,415 Washoe 540,071,624 763,382,635 260,089,389 - 531,863,233 2,095,406,881 White Pine 32,649,577 16,049,010 8,267,980 223,410 31,516,496 88,706,473 Multicounty Districts 4,143,346 4,143,346

TOTALS 7,383,559,011$ 5,123,357,688$ 2,514,674,831$ 58,090,289$ 2,369,375,882$ 17,449,057,701$ * Source: Final budgets filed June 1, 2013

FISCAL YEAR 2013-2014

Identify all statute and regulation violations reported within each audit.

Evaluate and monitor each local government's plan to correct the identified statute and regulation violations.

In addition, the Local Government Finance Division determines and advises local government officers of regulations,procedures and report forms for compliance with the Local Government Budget and Finance Act. The Division makessuch determinations after hearing the advice and recommendations of the Committee on Local Government Finance.

Review annual independent audits of local governments to determine whether the audits comply with regulationsadopted pursuant to NRS 354.594.

Refer to the State Board of Accountancy audits which do not adhere to regulations adopted pursuant to NRS 354.594.

LOCAL GOVERNMENTBUDGETED (ESTIMATED) EXPENDITURES-EXPENSES*

annual report - nevada powers, duties and functions. the department is responsible for administering...

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